http://apnews.myway.com/article/20091222/D9COD2OG0.html
The Commerce Department's new reading on gross domestic product for the July-to-September quarter was slower than the 2.8 percent growth rate estimated just a month ago. Economists were predicting that figure wouldn't be revised in the government's final estimate on third-quarter GDP.
The main factors behind the downgrade: consumers didn't spend as much, commercial construction was weaker, business investment in equipment and software was a bit softer and companies cut back more on inventories, according to Tuesday's report.
For those hoping that Christmas spending will result in a big economic boost, this is unlikely to happen.
http://www.breitbart.com/article.php?id=D9COHGNG0&show_article=1
Sales this time of year are vital to retailers, of course. But they're not nearly enough to drive the economy. Even if holiday sales exceed expectations, the broader recovery is expected to remain weak—for the rest of the year and beyond.
While holiday sales aren't vital to economic growth, consumer spending as a whole is: It accounts for about 70 percent of it.
And usually as recoveries begin, the economy roars to life as pent-up spending is lavished on cars, clothes, homes and appliances. Consumers become an engine of economic strength.
Not likely this time.
With credit tight and joblessness high, no one expects shoppers to provide enough punch to power the recovery. The government's surprisingly strong retail sales report for November—and a decent holiday shopping season—could turn out to be a last hurrah.
"Despite the glimmer of optimism on the surface ... the economic fundamentals are weak," said Sung Won Sohn, economist at California State University's Smith School of Business.
Many economists do think the economy is growing faster now than it did last quarter. JPMorgan Chase Bank, for instance, has bumped up its forecast for growth this quarter from 3.5 percent to 4.5 percent. But that's no thanks to consumer spending, which is forecast to slow compared with last quarter. Growth is instead being driven by companies restocking shrunken stockpiles of goods.
Yet that benefit could be fleeting. With consumer spending subdued, companies won't have to keep boosting their inventories.
And despite last month's dip in the unemployment rate, most experts don't think the unemployment rate has peaked yet.
http://www.guardian.co.uk/business/2009/dec/20/us-unemployment-rate-rise-continues
A seemingly unstoppable epidemic of joblessness has swept across America over the past 24 months. The US unemployment rate, which began 2008 at 4.9%, has risen to 10% and despite a slight drop of 0.2 percentage points last month, many economists believe it is yet to peak. More than seven million jobs have evaporated since the recession began and President Barack Obama's newly minted administration is facing increasingly vocal criticism for underestimating the problem.
A $787bn economic stimulus package intended to kick-start job creation has had only limited impact. The White House, which predicted unemployment would top out at 8%, is under pressure – a recent Gallup poll for USA Today found 55% of Americans disapprove of Obama's handling of the jobs crisis, putting employment equal with Afghanistan as the president's worst policy area.
"The media talks about the stockmarket recovering kind of as if it's a baseball team scoring – but it doesn't really make much difference to peoples' lives," says Dean Baker, co-director of the Centre for Economic and Policy Research in Washington, who warns that Democrats will get stung in November's mid-term Congressional elections unless employment improves. "What's really going to matter when people go to vote in November is whether they're working, whether they're getting a decent wage."
Regardless of what you hear from politicians, we haven't seen the end of our troubles yet.
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