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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

On GDP day, jobs still hog the spotlight

Thursday morning at 8:30, the Commerce Department will release its first pass at third-quarter U.S. GDP. The number is expected to show that the nation has at least technically emerged from this Great Recession, which began in December 2007.

In healthy times, the U.S. gross domestic product hums along at about a 4 percent growth rate--5 to 8 percent in boom times. On Thursday, many forecasters expect it to come in at 3.2 percent, after shrinking for several quarters. Others say the rate of growth will be more modest. Earlier this week, Goldman Sachs revised its GDP forecast downward to 2.7 percent.

If the number is much lower than estimates -- say, 1 to 2 percent -- expect the stock market to show real disappointment. Last week, the U.K. reported a slight drop in third-quarter GDP when forecasters were expecting exactly the opposite.

Regardless of the GDP number, for many Americans, it won't feel like the recession is over. The official unemployment rate is 9.8 percent and climbing. Most forecasters, and the White House, expect it to crest somewhere over 10 percent. It likely will hang there for some time -- maybe more than a year -- for a couple of reasons.

First, unemployment has continued to rise after each of the past recessions has ended. We know that. But what makes this one different is the depth and length of this recession. Simply put, it is unclear where the new jobs are going to come from.

Another point on today's GDP number: You probably shouldn't expect it to keep rising over the next few quarters to get back to its normal rate.

Many economists believe this is a one-time bump, a caffeinated Red Bull jolt to the economy provided by the $787 billion stimulus passed in February. That spending was back-loaded on purpose, to string out the stimulus, but it's well under way to being spent now and it can only prop up the economy for so long before it either has to organically take over and grow on its own or falter again. That's what the grim "double-dip" economists are predicting.

In other words: don't be surprised to see fourth-quarter GDP recede from whatever Thursday's number turns out to be.

Two examples: Look how vehicle sales fell off the table after the government-subsidized cash-for-clunkers program ended. Second, just yesterday the Senate reached bi-partisan consensus to extend the $8,000 first-time home buyer credit after it was set to expire at the end of next month. Now, it will go until the end of April. By then, the housing and realty industry hopes, spring home-buying will start to pick up. But that type of turnaround seems unlikely if unemployment stays around 10 percent.

So while Thursday's official big number is GDP, employment data still feels more relevant: Whether GDP has grown by 2.7 percent or 3.2 percent or some other number, there are still 7.6 million people who have lost jobs since this Great Recession began.

-- Frank Ahrens
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By Frank Ahrens  |  October 29, 2009; 7:06 AM ET
Categories:  The Ticker  | Tags: GDP, unemployment  
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Next: Biden aide defends big bank profits, bonuses

Comments

to all politicians...
30 plus millions is enough to put many of you out of a job in 2010...
you don't fix the job situation...
you don't get votes...

Posted by: DwightCollins | October 29, 2009 8:41 AM | Report abuse

International Paper is shutting down thier recently purchased paper mill in Franklin Virginia and shifting production to thier Brazilian mill and it's slave labor work force. The mill in Franklin, formerly Union Camp which was locally owned, is the regions largest employer and will put thousands on the street, the economic impact on the region will be catastrophic...and in time of war when so many there have family members serving (which is treason by the way).
Wall Street's economy and interests are not Main Street's or our citizen's nor our Republic's interets or economy. Our Main Street economy continues to worsen, home foreclosures are stll at record numbers, jobs continue to disappear everyday. When Washington and Wall Street talk about the economy they are talking about Wall Street's global economy and not our citizens local economies, the only one that counts by the way. Wall Street has deliberatly looted and scammed our Republic and citizens economy, the evidence and examples of theft such as the recent Subprime Mortgage sacm, the S&L Scam, Milkens Junk Bond Scam, all of which were the largest thefts of wealth in world history, would take pages to list. They have deliberatly off-shored our industrail base and citizens jobs. Their cadre of career politicans have stabbed us in the back, double crossed us and sold us out. One example suffices the Wall Street Financials that all of a sudden became banks, even though a citizen could not get a car loan or a mortgage from them, after which they became eligible for Federal bailouts because they were banks, do the Wall Street vermin and thier self serving career politician think that we citizens do not know what they have been doing and that they are responsible for economic condition. Wall Street is about empire, the United States is about Republic and teh value of citizenship. More citizens are becoming ware of the fact we are at war with Wall Street and our survival depend on...what I want to say here would be removed for the threats and obscenities...hopefully the record gun sales are an indication of the public's plans and good intentions for Wall Street and Washington vermin, traitors and criminals.

Posted by: 123Njord | October 29, 2009 8:46 AM | Report abuse

What a focking blind IDIOT! If these are truly the "Best and Brightest", WHY CAN'T THEY LEARN HOW TO INVEST ALL OUR 401KS AND RETIREMENT PROFITIBLY INSTEAD OF USING IT FOR HIGH RISK GAMBLING AND BEING BACKED BY OUR NEW CHANGE GOVERNMENT SUPPORTING THEIR HIGH RISK GAMBLING.

HOW ABOUT THEY START SHOWING A LITTLE RETURN ON ALL OUR 401K AND RETIREMENT INVESTMENTS IF THEY ARE SO GODDDDDAMMKMMM SMART!!

Posted by: Impeachbush99 | October 29, 2009 9:52 AM | Report abuse

I guess since there has been ZERO effort by Congress or the Obama Administration to address and correct the root causes of the financial crisis, the financial industry is being allowed to continue to rob us of all our retirement contributions by sending all of We the People money's directly into the Wall Street and Bank Executives wallets via their payroll and Bonus systems.

Biden aide defends it all...What a focking blind IDIOT! If these are truly the "Best and Brightest", WHY CAN'T THEY LEARN HOW TO INVEST ALL OUR 401KS AND RETIREMENT PROFITIBLY INSTEAD OF USING IT FOR HIGH RISK GAMBLING AND BEING BACKED BY OUR NEW CHANGE GOVERNMENT SUPPORTING THEIR HIGH RISK GAMBLING.

HOW ABOUT THEY START SHOWING A LITTLE RETURN ON ALL OUR 401K AND RETIREMENT INVESTMENTS IF THEY ARE SO GODDDDDAMMKMMM SMART!!

Posted by: Impeachbush99 | October 29, 2009 9:55 AM | Report abuse

If we continue to reward companies for using slave labor around the world rather than re-invest in American workers we'll find ourselves sliding back into a hole. When we've built a consumer market here that basically makes the whole world's economy hum you're cutting your own hamstrings to attempt to suppress wages in the U.S.A.. You can't have it both ways because the .35 cents an hour crowd isn't going to be able to afford the products that they're making and eventually it will destabilize the gov't that the oppressed are under and hurt the profits for the parent companies contracting the work overseas.

The Reagan dream is over.......we implemented it and it bankrupted us and dragged the rest of the world down a few pegs too.

Posted by: theobserver4 | October 29, 2009 11:06 AM | Report abuse

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