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Last quarter not as grow-y as we thought

GR2009122201340.gifBad news:

"The Commerce Department’s final estimate showed gross domestic product grew at a 2.2 percent annual rate instead of the 2.8 percent pace it reported last month. Analysts polled by Reuters had forecast the report to show GDP, which measures total goods and services output within U.S. borders, unrevised at a 2.8 percent growth rate in the third quarter.

"It was still the fastest pace since the third quarter of 2007 and ended four straight quarters of decline in output. The resumption of growth in the July-September period probably ended the most brutal recession since the 1930s."

In other words, our not-that-good growth was worse than we thought. Yglesias comments that "this, rather than anything related to health care, is the real political challenge heading into the midterms. I don’t think you can stand in a country where unemployment is stagnating above nine percent and say 'the health care system will be much better in 2014!' Unfortunately for Congress, there’s arguably a limited amount they can really do if the Fed doesn’t want to acknowledge that the path we’re currently on is a bad one."

By Ezra Klein  |  December 22, 2009; 11:44 AM ET
Categories:  Economy  
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On the bright side, it should quash any talk of bond market disquiet, and bolster the case for more stimulus. Yesterday MSNBC was touting a ludicrous poll they did of sundry economists -- most of whom said we don't need more stimulus. Yeah, right.

Posted by: Jasper99 | December 22, 2009 1:10 PM | Report abuse

And of course the market is up because all fatcats care about is that interest rates stay low.

Posted by: bmull | December 22, 2009 1:28 PM | Report abuse

Cheer up... The economy is recovering, and unemployment will go down regardless of a stimulus package.

Posted by: RandomWalk1 | December 22, 2009 2:15 PM | Report abuse

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