US Economy Grows by 3.50% in the 3rd Quarter

us-economy-grows-by-350-in-the-3rd-quarterAfter four straight quarters of declines in Gross Domestic Product (GDP) the U.S. economy expanded by a healthy 3.5 percent in the third quarter of 2009 according to The Bureau of Economic Analysis.

The recession which started in the fourth quarter of 2008 is over, but will officially be over when we have back to back quarters of positive GDP growth.

Adding to positive growth in the third quarter was personal consumption, exports and federal government stimulus spending. Automobile output had a significant contribution to GPD in the third quarter, adding 1.66 percentage points to the third-quarter change in real GDP. The Cash for Clunkers program increased motor vehicle purchases in the quarter and is the main reason for the increase.

Subtracting from growth in the third quarter was an upturn in imports, a downturn in state and local government spending, and a deceleration in federal government spending.

Author: Brian McKay
October 29th, 2009