The initial estimate on economic growth in the third quarter -- July, August, and September -- was an underwhelming 2 percent. This morning, revised figures point to a much healthier economy.
The economy grew at a substantially faster pace in the third quarter than first thought, powered by increases in business inventories and federal spending.
After initially saying output increased at an annual rate of 2 percent, the Commerce Department on Thursday revised its estimate to show growth of 2.7 percent in the three months that ended Sept. 30.
While businesses have remained cautious amid fiscal uncertainty in Washington and weak growth overseas, consumer spending in the United States has moved along in recent months at a healthier pace.
The 2.7 percent GDP figure is the best since the end of 2011, and the second best quarter of the last three years. Talk of a "double-dip recession," common earlier in the year, is now nowhere to be found.
It's also worth noting that economic growth would have been even stronger had it not been for austerity-like policies at the state and local level, where public spending has been curtailed sharply.
As for the politics, the conventional wisdom suggests President Obama won a second term in spite of a struggling economy, but in light of the stronger growth shortly before the election, it may be time to consider whether Obama prevailed because of an improving economy.
Above, you'll find a chart showing GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.
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As for the politics, the conventional wisdom suggests President Obama won a second term in spite of a struggling economy, but in light of the stronger growth shortly before the election, it may be time to consider whether Obama prevailed because of an improving economy.
As for the politics, the Republicans held the House since 2010, and still do. Is this why THEY got re-elected? Hmmmm...makes you think. Well maybe me, not you. This is where I find Democrats talking with their foot in their mouth. They have to be very careful, or deceitful, when talking about how good or how things are looking up, because they might have to acknowledge that the Republicans held the purse strings in the House during this upward turn.
Two thoughts. Republicans held the house mostly with the help of their old friend Gerry Mander. Second, the house has not been holding the budget down the last two years. They have consistently refused to actually cut much of anything. For example they have kept the DOD budget at bloated levels, voting in programs the DOD doesn't want or need.
They took the House with millions fewer votes because of gerrymandering, and lost both total seats and every competitive race.
Mazel.
What? 'This doesn't look like a recovery to me, the President is totally ineffective ... no wait, what I meant was, the recovery is due to the House Republicans...'
I've heard this some where before.
Oh, yeah. 'Let Detroit go bankrupt ... Saving the auto industry? I did that.'
Ain't no dang facts gonna tell me how to think!
snark
Channeling Chance the Gardener, in Being There, I suggest that the Ship of State is a ponderous vessel, and needs both sufficient time and a steady hand at the rudder to change course.
It needs Jack Sparrow.
Well gee, Steve. If the economy is so great why is everyone still so miserable?
I don't know Shooter why are you miserable. The Koch job not working out?
I'm fine and dandy. It's the sad sacks from your side that are whining.
Shooter, they are just confused because they have to be careful about saying that things are "good" because they might have to give the House some credity. Saw Obama mentioned in the piece (who doesn't actually vote on anything), but not the Republican House, who actually votes on things.
I'm miserable because I have to read your substance-free bunk every day.
Blankman, speaking of whiners, have you not been watching the GOTP led by John McShame dipping into incoherence lately, Bonehead saying one thing only to walk it back the next day, FAUX NOOZ whining and dipping into the "more crazy" bag since the election? Oh yeah, that's right you people don't do "facts"!
And if I am miserable, it's because I'm tired of the nonsensical, fact free, hypocrisy that spews forth from the right!
I can't speak for anyone else, shooter, but I'm not miserable. My President won reelection, my party gained seats in the House and Senate, and the other major party in this country seems hell-bent on self-destruction, which bodes well for the 2014 mid-terms.
Life is good.
Happy, happy, joy, joy." If you're happy and you know it, clap your hands, or do the famous Alibabba Dance". Don't worry be happy. Why am I such a misfit?
I wouldn't want anyone to think that I think I speak for anyone but me, but I'm not miserable.
I'm embarrassed that I have not been more politically active these past several decades. I accept some responsibility for letting the Taliban/Teaparty get as far as they have. I hope my son can forgive me for reading and playing D&D while a privileged few effectively disenfranchised millions of Americans and brought our economy to the brink of total collapse.
No more.
PS - Re Shooter; Never try to teach a pig how to sing. You will only have wasted your time, and it just irritates the pig. The Taliban/Teaparty adamantly oppose allowing facts to influence their thinking.
I'm not miserable, Shooter. Stop projecting.
Its all he has left.
LOL
just like the poor use of reverse physiology the other one is trying to pull.
well SteveF you know the old saying Misery loves company. and it seems that the right/wrong side is pretty miserable right now.
Steve,
I enjoy your writing and this post. Just a quibble on the chart. The stimulus didn't really begin until the second quarter of 2009. It passed on 2/13/09, but no significant spending occurred until the second quarter, and actually not until late in the second quarter.
How about Republicans just think that THEIR tax dollars are going for defense and the Dems can think THEIR tax dollars are going for social issues or rebuilding crumbling infrastructure. I mean, it's all pooled and then redistributed (*GASP* the dreaded "R" word!), right? Maybe if the 2% think in those terms they would be more willing to loosen up the wallet a bit. Hell, we could probably order all those subs Mitt was talking about!
Whoops
The truth is the economy is improving despite the best efforts of our Republican friends. They gambled and lost.
If they knew just a little about economics they would have known that they couldn't hold our economy down for a full four years, not without outside help. Too much built up demand over too long a period. Even the great depression economy was recovering some by 1933.
Actually, it wasn't. True, the number of those unemployed had stopped increasing - temporarily. Then the banks began closing in February 1933. The pace increased throughout that month and by the time of the Inaugeration, March 4, almost every Governor has shut the banks in their respective states. The day after FDR became President, he used a WWI law still on the books to shut every bank and stop the buying and selling of gold bullion.
The NRA (National Recovery Act) was passed during the famous "Hundred Days" to help restart the economy, but it was more of a morale booster than anything else during 1933. Any increased employment due to the NRA most likely only soaked up the increase in unemployment caused by the bank closures.
!933 was the year direct Federal assistance in providing food and shelter began, 1934 was when the economy finally began its recovery - nearly 5 years after the Crash.
Actually, stimulus started a little to the right of when you have it. 1Q09 includes a month of Bush and a month 'til things were passed. Implementation of tax cuts started right away, but other stimulus took longer.
Want even more growth? Here's my idea, raise the capital gains tax back to 28%. If those with all the money can make a fortune through investing and only pay 15% or less on their profits then where is the incentive to start up or grow a business that will restrict their tax dodge?
Sure most big businesses don't pay any real tax but those who get the big checks do.
Taxes on so called small businesses are already low.Self employed owners pay at most 28%.Of course in GOPer land a small business is any business including GE or AT&T.
What the heck. I still like the idea of the first thirty grand earned being tax free and a fixed rate of @17% for everything above that amount.But even folks who will never have enough deductions to equal thirty grand of actual after tax savings cry about losing deductions. Imagine tossing over ninety thousand bucks away in interest a year to get thirty thousand in tax savings? If your mortgage is that high you should have paid cash for something a little smaller.The bank of course thanks you for not using your money wisely.
In the immortal words of Hermain Cain, "I don't have facts to back this up, but..." Both the Commerce Dept and the U. S. Chamber of Commerce have "Commerce" in their names, so they're probably working together. We all know that the Chamber of Commerce is just a shill organization for the Republican Party. I think they coerced the Commerce Dept to intentionally manipulate the numbers to make the recovery look worse than it was in order to help Romney's election chances.
Don't believe me? My crazy conspiracy theory makes as much sense as the Obama administration manipulating the Bureau of "Labor" Statistics numbers to improve his chances.
While the economic numbers are good news, there are still many people without jobs. And that is because people are not buying homes and government is not spending money on infrastructure projects aside from roads. There are vast pools of construction workers who need work and until they return to work, the economy will slowly chug uphill. The manufacturing sector needs a similar boost with investments in tech and trade sanctions to rebuild the country's manufacturing base. Labor will back Dems who are willing to take the steps to pass legislation to prevent currency manipulation, unfair trade policies and end the tax subsidies to companies shipping jobs overseas. Make it uneconomical for US companies to send manufacturing overseas and bring the goods back here at cheap prices.