U.S. Recession officially over

osprey4 · October 29th, 2009, 11:52 AM

Quote:

The Commerce Department, in its first estimate of third-quarter gross domestic product on Thursday, said the economy grew at a 3.5 percent annual rate, the fastest pace since the third quarter of 2007, after contracting 0.7 percent in the April-June period.

The growth pace in GDP, which measures total goods and services output within U.S. borders, was above market expectations for a 3.3 percent rate. The economy last grew in the second quarter of 2008.

"Better than expected GDP is confirming that the Great Recession has ended," said Kevin Flanagan, fixed-income strategist for Global Wealth Management at Morgan Stanley in Purchase, New York.

MTAtech · October 29th, 2009, 12:06 PM

Yes, but it will still be a slow recovery with sustained unemployment through next year. Read tomorrows Krugman column.

cyphen · October 29th, 2009, 02:16 PM

"A common equation used to calculate GDP is as follows:
GDP = Consumption + Government Expenditures + Investment +Exports - Imports"
Government expenditures have been HUGE, but that's NOT representative of any kind of stable economy. Has consumption increased?How about investment? Exports? I think most of this GDP spike is due to the false indicator of government expenditures. That is not economic growth.

MTAtech · October 29th, 2009, 03:20 PM

Quote:

Originally Posted by cyphen

Has consumption increased?

Car sales accounted for a large part of that 3.5% increase due to the Cash for Clunkers program.

cyphen · October 29th, 2009, 03:24 PM

And how much of that, precisely BECAUSE it was a government program, counts as government spending, as opposed to consumer spending?

The Real Bingo · October 29th, 2009, 05:07 PM

Quote:

Originally Posted by MTAtech

Car sales accounted for a large part of that 3.5% increase due to the Cash for Clunkers program.

Just as suspected. Expect another negative quarter after this one.

pickel · October 29th, 2009, 06:37 PM

I bet this Flanagan crackpot doesn't have the nads to go up to the MS Delta and tell that BS to 20% unemployed. Never believe an Irishman without a shot of whiskey or a beer in his hand.

lost-and-found · October 30th, 2009, 02:24 PM

YAY, bring out the party balloons...oh wait, I still can't afford them.

engracio · October 30th, 2009, 02:57 PM

Quote:

Originally Posted by lost-and-found

YAY, bring out the party balloons...oh wait, I still can't afford them.

Meh, just charge it. Got to celebrate sooner than later.

Chuckiechan · October 30th, 2009, 07:30 PM

The problem is consumer spending. People are not comfortable enough with the future to open their wallets.

It's a damned if you do and damned if you don't scenario: A higher savings rate is good for the countries liquidity - we won't need to borrow as much from China - but bad for consumption, since it is being saved and not spent.

Bottom line is the economy will continue to tread water until people rebel against an economy that doesn't include them. So far, we are talking about around 20% unemployed, not looking or gave up, and recently graduated and not ever employed.

"Change we can go broke with!" EeeHaw!