Bloomberg Businessweek – Economy in U.S. Surpasses Pre-Recession Level After 15 Quarters
The value of goods and services produced in the U.S. surpassed its pre-recession level after 15 quarters, taking three times longer than the average for 10 previous recoveries since World War II. Gross domestic product expanded at a 2.5 percent annual rate in the period from July through September, the Commerce Department reported yesterday, the fastest pace in a year and up from 1.3 percent in the prior three-month period. After adjusting for inflation, GDP climbed to $13.35 trillion last quarter, topping the $13.33 trillion peak reached in the last three months of 2007.“The American economy finally has accomplished the recovery and has now entered the expansion,” said Neal Soss, chief economist with Credit Suisse in New York, who was an aide to former Federal Reserve Chairman Paul Volcker. “But the growth is clearly too slow to solve the most significant problems the economy faces: jobs and getting the public budgets under control.” Consumers reduced savings to boost purchases and companies stepped up investment in equipment and software, even as the biggest drop in incomes in two years raises concerns about whether the spending increase will continue. The number of Americans with jobs last month, 131.3 million, was lower than the 138 million workers in December 2007, when the 18-month recession began, according to Labor Department data.
The Wall Street Journal – Recession Fears Recede as Economy Grows 2.5%
The labor market has been improving slowly, and the number of Americans filing new claims for jobless benefits fell again last week by 2,000 to 402,000, the Labor Department said in a report Thursday. ut budget cuts by state and local governments signal more gloom for employment as well as economic growth. State and local governments subtracted 0.16 of a percentage point from growth last quarter. The government of Maryland’s Baltimore County is offering employees early retirement packages in a bid to trim 200 jobs. The move is designed to save at least $15 million a year out of a roughly $1.6 billion operating budget, a county spokesman said. The county’s tax revenue is declining, and it also is dealing with substantial cuts in state and federal aid. Economic uncertainty and a dreary job market have been a drag on housing, which showed little improvement last quarter, according to the GDP report.
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Category: Think Tank
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