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Economy Grew 3.2%: Fastest Pace in 2 Years
Oct. 25 (Bloomberg) -- The economy in the U.S. probably grew in the third quarter at the fastest pace in two years as government stimulus helped bring an end to the worst recession since the 1930s, economists said before reports this week.
The world's largest economy grew at a 3.2 percent pace from July through September after shrinking the previous four quarters, according to the median estimate of 65 economists surveyed by Bloomberg News. Other reports may show sales of new homes and orders for long-lasting goods increased.
The fastest pace in TWO YEARS? Geeh, does that mean that President Obama and the Democrats have done better with the economy in his first 9 months in office then President George W. Bush did in his last year and a quarter?
Yup! Why, you ask? The Recovery and Reinvestment (Stimulus) bill that Obama and the Democratic Party passed within in a month of being in total control -- that's why.
Yet we continue to hear the Republican Party and most in the media bickering over how 'slow' the economy is improving after we came very close to having another Great Depression. Geez, will they ever see the light? I doubt it.
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Wake me when unemployment goes down or the median income goes up. What do I care if the economy grew if none of it trickles down past the top 1%?
October 25, 2009 12:46 PM | Reply | Permalink
If the economy is GROWING so will employment very soon. Unemployment will never lesson if economy is dropping.
Geez....imagine where it would be today with Bush in charge? Then complain.
October 25, 2009 1:01 PM | Reply | Permalink
Coonsey - how do you define "very soon"?
Here's what Christina Romer had to say recently about unemployment.
http://blogs.reuters.com/james-pethokoukis/2009/10/22/romer-unemployment-likely-to-remain-severely-elevated/
Given how far we fell, it's not surprising that the economy will grow in the 2-3% range. Remember we fell roughly 2-3% in Q3 2008.
But the rebound I think is more due to the fact that the credit markets have re-opened thanks to the Fed opening up their balance sheet and buying most of the Treasury issuances and Freddie/Fannie debt. I don't think the Stimulus has really had much of an effect yet. And what happens now that the "clunkers" program and the first-time home buyer credits expire?
The consumer is still hurting and hasn't deleveraged enough yet despite all that's happened.
October 25, 2009 2:15 PM | Reply | Permalink
In this particular case, we will see significant/"obvious" employment growth (and unemployment reduction) eventually, probably in 2011. But GDP can grow while employment stays steady or shrinks, and GDP must grow at a pace that meets the population growth rate just to keep living standards steady. (That's a bit under 1% these days.)
If we can keep up the current GDP growth rate, we should see improvement even sooner than 2011, but I don't expect that we will keep it going at 3.2%+ for the next year.
October 25, 2009 2:19 PM | Reply | Permalink
I don't see a catalyst for employment growth "very soon" or even "somewhat soon." I'm glad you posted about the GDP growth, it really is a triumph for Obama and its stimulus and is something the teabaggers should have to answer for but there's another economic measure that's growing faster than ever: productivity. It means workers are producing more for less and employers are not going to give up those gains any time soon.
October 25, 2009 3:09 PM | Reply | Permalink
I'll add that "productivity growth" can result in increasing GDP (even rapidly increasing) without increasing employment. To take the example to silly extremes, imagine someone invents a computerized system (with nano-tech Everything Assembler attached, so that it can build "real-world" products, factories, etc) that makes it possible for a single person to solve every single problem ever, just by pressing the right button. Employment plummets to one: the computer operator. Productivity shoots to the sky, GDP goes up infinitely, etc., and yet everyone (except that one person) is now unemployed.
In practice, of course, this does not actually happen ... and even if it did, we could adapt by setting the "normal work week" to "one second per lifetime", where you earn your life by pressing the right button, once, on the Magical Computerized System. :-) So "productivity" is something we can adapt to. (We're not actually doing it now, but we could.)
American productivity rates are very high compared to the rest of the world, which is one reason why we have such a small manufacturing sector (compared to the rest of the world) yet produce so many manufactured goods (compared to the rest of the world: the rest of the world does produce more, but using way more workers). The high productivity rate really means we should probably have a shorter "standard" workweek (than the 40 hour one we finally got thanks to unions almost a century ago now), but that's another battle entirely....
October 25, 2009 3:48 PM | Reply | Permalink
Sorry but I already see an increase on jobs listing, even if just slightly, in my own paper. Yes Jobs will be increasing SOON.
Mark my word.....(and i'm no expert, just guessing)
October 25, 2009 4:04 PM | Reply | Permalink
From your fingers to the economy's ears, Coonsey. Will be more than happy to admit I'm wrong, let's revisit this question at the end of 1Q 2010.
-Mike
October 25, 2009 5:26 PM | Reply | Permalink
Okey Dokie Destor23, although it will be MUCH better by mid summer. That's my fortune telling for the day.
October 25, 2009 6:03 PM | Reply | Permalink
Just read a piece of market analysis that favors your view. Argument is that profit and GDP growth, plus some signs that demand is improving are proof that the cost-cutting and job-cutting have gone too far. The analyst says to look for an uptick in temp worker hirings as a clue that things will improve along the lines you're describing.
October 26, 2009 8:48 AM | Reply | Permalink
Of course I'm right -- I know it ALL, didn't you know that...LOL
I sure HOPE and PRAY that we all are.
October 26, 2009 8:52 AM | Reply | Permalink
Destor - take a read of this analysis.
http://www.ritholtz.com/blog/2009/09/welcome-to-the-new-normal/
Shows that it will be years before we get back to 5% unemployment.
There are so many people working part-time right now, that it will take a long time before we see a drop in the headline unemployment number. Much of the near-term growth will just result in those part-timers going back to full time. But that doesn't change the headline number we all read about in the papers.
October 26, 2009 8:23 PM | Reply | Permalink
Yours looks to be a pretty good guess,
http://news.yahoo.com/s/ap/20091026/ap_on_bi_ge/us_nabe_survey
October 26, 2009 10:08 AM | Reply | Permalink
Jonnienohands, you need to post this yourself --- it's not in the mainstream and needs to be READ!
Thanks
October 26, 2009 11:21 AM | Reply | Permalink
You are welcome to advance with this info, shoulder problem is limiting my typing.
October 26, 2009 2:47 PM | Reply | Permalink
Thanks Coonsey; I do not recall hearing this on the MSM which is usually on background during the day.
Thank you.
October 26, 2009 10:56 AM | Reply | Permalink
I don't think the jobs will come back until the administration sorts out the ongoing credit crunch for small businesses. Letting CIT go bankrupt isn't (or won't be) helping.
October 26, 2009 11:38 AM | Reply | Permalink
Well that's good news but to be honest I would like to know how much of that is based on the Federal Reserve buying all of the junk assets that the banks had on their books? Their were some pretty amazing profits made in the bailed out banks and I really want to know how much of that was because our Fed just let them trade crap for good money?
And hey maybe next quarter will be just as good for them. I mean they have no more regulation now than they did creating this entire debacle.
October 26, 2009 12:22 PM | Reply | Permalink