This is a chart highlighting the GDP growth of the U.S. economy from the start of the recession in December of 2007 to the end of September 2012. The economy beat expectations and hit 2% GDP growth in the third quarter of 2012 fueled by consumer spending, autos and housing. The report isn’t AWESOME but it’s solid. This is especially since the world is essentially waiting to see who’s going to win this election. If Obama wins – taxes for the rich will go up and businesses will be able to plan based off of finally moving past some amount of gridlock. If Romney wins – taxes for the rich will go down and businesses will be able to plan based on that.
And when you throw in the impending fiscal cliff – companies aren’t sure whether or not huge automatic cuts to government spending will affect them or not … so everything has grinded to a halt. And still the economy driven by consumer spending was solid. And if you’re uncertain as to the huge improvements in the U.S. economy – just read HERE.
So – today … Mitt Romney gave a statement on the economic #’s – he said:
Today, we received the latest round of discouraging economic news: Last quarter, our economy grew at only two percent, 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.
So … it’s DISCOURAGING according to Mitt. But as Salon points out HERE … Mitt Romney never even hit 2% GDP growth in Massachusetts when he was governor:
By the way, how fast did the economy grow when Mitt Romney was governor of Massachusetts? According to data from the Commerce Department’s Bureau of Economic Analysis, average real GDP growth was 1.5 percent per year in Massachusetts from 2002 to 2006. For each of the years Romney was in office, the economy grew 1.49 percent, 1.86 percent, 1.14 percent and 1.43 percent, respectively.
And how did Romney assess the economic growth of the state under his leadership? “When we took office, the state economy was in a tailspin. Today, jobs are being created by the thousands and our economy is stronger,” he said in early 2006, his last year in office. So less than 2 percent was good then, but 2 percent is bad now.
Jared Bernstein breaks down the report on 3rd quarter GDP growth HERE; an excerpt:
A few observations about the report:
–The positive factors boosting the economy’s growth last quarter were consumer spending and government. Investment and net exports were both drags on growth. The latter likely reflects slower growth in China and recessionary conditions in much of Europe.
–If you dig a bit into the investment accounts, there’s a bit of good news consistent with a theme I’ve been stressing of late: improvement in the housing market. Investment in housing added a third of a point to growth last quarter and has been a plus factor for the last six quarters (see figure below).
–On a year-over-year basis—a less volatile gauge of the underlying growth pace—GDP growth has done a little better, up 2.3%.
–Unlike home investment, business investment in capital goods and structures was down last quarter. I suspect this in part reflects a “wait-and-see” attitude by businesses right now. Questions like “who’s going to win the election?”…and “how will the fiscal cliff get resolved?”…may be weighing on businesses’ “animal spirits.”
Consumer sentiment is at a 5 year high according to Reuters HERE:
Consumer sentiment rose to its highest level in five years in October as Americans were more upbeat about prospects for the economy and their own finances, a survey released on Friday showed.
The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 82.6 from 78.3 in September. It was at its highest level since September 2007 on a final reading basis.
Still, that was slightly below the preliminary reading of 83.1 and shy of economists’ expectations for 83.
The Washington Post explains how the “fiscal cliff” that Republicans forced into law is already hurting the economy HERE:
The “fiscal cliff” is still two months off, but the scheduled blast of tax hikes and spending cuts is already reverberating through the U.S. economy, hampering growth and, according to a new study, wiping out nearly 1 million jobs this year alone.
The report, scheduled for release Friday by the National Association of Manufacturers, predicts that the economic damage would deepen considerably if Congress fails to avert the cliff, destroying nearly 6 million jobs through 2014 and sending the unemployment rate soaring to near 12 percent.
Across the nation, companies are bracing for the fallout by laying off workers, letting jobs go vacant and postponing major purchases. Commerce Department data released Thursday show business investment stalled in September, as orders for core capital goods such as machinery and equipment plateaued at $60.3 billion.
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