Gross Domestic Product Rises At 2.0% in Second Quarter

Gross Domestic Product (the measure of all goods and services produced in the country during the year) showed some improvement in the third quarter and slightly beat estimates.  Third quarter GDP was 2.0% compared to a second quarter GDP of 1.3%.  The 2.0% increase means the recovery is continuing, although at a snail’s pace.  The economy needs to string together a couple of solid quarters, (3.5%-4.0%) before there is confidence in the so-called recovery.  Addressing the report, President Obama said it’s a sign his administration’s policies are working.  Adding to that, Obama campaign spokesman Adam Fetcher said, “while we have more work to do, today’s GDP growth report, showing the 13th stright quarter of growth, is more evidence that our economy continues to come back from the worst recession since the Great Depression under President Obama’s leadership”.  This claim is highly debatable since continued growth of 2.0% or less will not be enough to get Americans back to work.  It might slow the rate of decline, but that’s it.  Mitt Romney, speaking at a campaign event in Iowa, obviously presented a very different picture of this report.  He said, “last quarter our economy grew at only 2.0%, less than half the 4.3% rate the White House projected after passing the stimulus bill  Slow economic growth means slow job growth and declining take-home pay.  This is what four years of President Obama’s policies have produced”.  In terms of the less than stellar GDP, neither man is entirely correct or entirely incorrect.  On the one hand, at least the economy continues to grow steadily.  On the other hand, the recovery can’t seem to pick up any steam, which would help create a serious recovery.  Since we won’t have another opportunity to view the Q4 GDP report before the election, the meaning of the report will continue to be interpreted differently, depending on where one falls in the political spectrum.  One thing is certain, and can’t be disputed, a 2.0% GDP is not enough to expand this economy and says as much about how far we have to go, as it tells a story of where we’ve been.

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