Recession over? Nation’s GDP rises 3.5 percent in third quarter

Thursday, October 29, 2009, 10:30am EDT
Baltimore Business Journal – Kansas City Business Journal

The nation’s gross domestic product increased at an estimated annual rate of 3.5 percent in the third quarter, the Bureau of Economic Analysis said in an advance estimate Thursday.

The data offers the strongest evidence yet that the recession that began in December 2007 ended during the summer — though many economic experts are quick to point out that the recovery has been propped up by government stimulus programs such as the homebuyer tax credit and the Cash for Clunkers program designed to boost automobile sales.

In the second quarter, real GDP — defined as the output of goods and services produced by labor and property in the U.S. — decreased 0.7 percent, the BEA said in a release.

The BEA said its third-quarter advance estimate is based on source data that are incomplete or subject to revision. The agency will release another third-quarter estimate, based on more complete data, on Nov. 24.

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures, which accounts for about two-thirds of GDP. There were also gains in exports, private inventory investment, federal government spending and residential fixed investment. Imports also increased, the release said. The quarter also saw a smaller decrease in nonresidential fixed investment, partly offset by an upturn in imports, a downturn in state and local government spending, and a deceleration in federal government spending.

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