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| Economy |
| Economy's rebound not as strong as first thought |
| 2009-11-24 |
| The economy grew at a 2.8 percent pace last quarter, as the recovery got off to a slower start than first thought. A dead cat bounces higher. The Commerce Department's new reading on gross domestic product wasn't as energetic as the 3.5 percent growth rate for the July-September period estimated just a month ago. The main factors behind the downgrade: consumers didn't spend as much, commercial construction was weaker and the nation's trade deficit was more of a drag on growth. Businesses also trimmed more of their stockpiles, another restraining factor. Growth probably won't be strong enough to quickly drive down the nation's unemployment rate, currently at 10.2 percent. It's only the second time in the post-World War II period that unemployment has topped 10 percent. Some economists think economic growth will slow to around a 2.5 percent pace in the current quarter, Then go negative next year as government enforced, debt financed giveaways expire. although others say it could clock in at about 3 percent if holiday sales are better than expected. Most say they think the economy will weaken again next year, with growth at a pace of around But Tuesday's report shows that some of that spending was a bit less robust than initially thought. Spending on homes and other residential projects soared at an annualized pace of 19.5 percent last quarter, a little slower than the 23.4 percent rate first estimated. $8000 "free" money expires Jan 1. Spending on big-ticket "durable" goods -- including cars -- jumped at a pace of 20.1 percent, down from 22.3 percent. $3000 or $4500 "free" money already gone. Auto sales back in the tank for Q4. On the business side, companies cut back spending on commercial construction -- a weak spot in the economy -- at 15.1 percent annualized pace. That was deeper than the 9 percent annualized cut back first estimated. Businesses also trimmed stockpiles of goods by $133.4 billion last quarter, slightly more than initially estimated. And the nation's trade deficit ended up shaving 0.83 percentage point off GDP last quarter, more than first thought. Unlike past rebounds that were driven by the spending of everyday Americans, this one appears to hinge on spending by businesses, foreigners and -- until it runs out -- the government. |
| Posted by:ed |
| #3 A trillion here.... A trillion there.... Pretty soon your talking about real money... |
| Posted by: CrazyFool 2009-11-24 14:18 |
| #2 Print up another trillion or so... Economic Project Orion here we come. |
| Posted by: Bright Pebbles 2009-11-24 12:58 |
| #1 It is only going to get worse. Especially if the government increases taxes. Expect things to get as bad as 1932. |
| Posted by: DarthVader 2009-11-24 10:36 |