Posted on 11/24/2009 4:37:24 AM PST by Red in Blue PA
WASHINGTON (AP) -- Remember the economy's return to growth last quarter? Well, it probably wasn't as energetic as first thought.
A government report due out Tuesday morning is expected to show that the economy expanded at a pace of 2.9 percent from July through September, according to Wall Street economists surveyed by Thomson Reuters. If they are right, it would mark a slower expansion than the 3.5 percent pace reported a month ago. Most of that rebound reflected federal support for spending on homes and cars.
The main forces behind the expected third-quarter downgrade: commercial construction was weaker, the nation's trade gap was more of a drag, businesses trimmed more of their stockpiles and consumers didn't spend as much.
So, the good news is the economy finally started to grow again, after a record four straight losing quarters. The bad news: The rebound, now and in the months ahead, probably will be lethargic.
Federal Reserve officials and other economists say growth won't be strong enough to quickly drive down the nation's unemployment rate. The nation's current 10.2 percent jobless rate marks only the second time in the post-World War II period that unemployment has topped 10 percent.
"It's a half-speed recovery," said Stuart Hoffman, chief economist at PNC Financial Services Group. "We're in the slow lane."
(Excerpt) Read more at finance.yahoo.com ...
It is too early to call it a recovery at all. As stated in the article, most of the 2.9 revised GDP growth could be attributed to government transitory spending. Once gone, most of that “growth” is gone. What really happened is the government took money from one area (actually a few) and spent it in other areas. A redistribution which because of the way the economy is measured was able to call it “growth” for that quarter. Let’s see what happens the next couple of quarters. I think by second quarter 2010 we will have the answer...and I don’t think it will be positive.
I am convinced that the Government bodies are “cooking” the numbers on unemployment and GDP. First showing some improvement, and then revamping the figures either downward (in the case of GDP) or upward (employment) three weeks later. Simply put, the statistical data this government issues, of whatever nature, is not to be trusted.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.