Economy grew at 2 percent rate in third quarter

Yahoo News ^ | 22 Nov 2011 | MARTIN CRUTSINGER

[mandaladon]

WASHINGTON (AP) — The U.S. economy grew more slowly over the summer than the government had earlier estimated because businesses cut back more sharply on restocking of shelves.

The Commerce Department said Tuesday that the economy expanded at an annual rate of 2 percent in the July-September quarter, lower than an initial 2.5 percent estimate made last month. The government also said after-tax incomes fell by the largest amount in two years, reflecting high unemployment and lower pay raises.

The downward revision was largely because weaker data on inventory building came in after the government's first estimate. Many businesses reduced their stockpiles over the summer, probably because they didn't anticipate the strength consumer and business spending.

A decline in inventories is not always a bad sign. Economists believe this could lead to stronger growth in the current quarter, if businesses foresee more demand and restock their shelves.

Economists predict growth will strengthen to around 3 percent in the October-December quarter. Many raised their estimates after seeing encouraging October reports on retail sales and factory output.

"While this report is disappointing, it is a look back in time," said Jennifer Lee, senior economist at BMO Capital Markets. "It is encouraging, to say the least, to see the October data coming in stronger, which is good news for the current quarter."

[mandaladon]

And many Americans could take home even less next year if Congress doesn't extend a Social Security tax cut and emergency unemployment benefits. Both expire at the end of this year.....................The economy will improve when Zero is sent to the unemployment line !!!

[writer33]

We’re saved! /sarcasm.

[mandaladon]

I wonder when was the last time the government under Obama estimated growth lower than the actual ? It’s always revised down

[mountainlion]

To be corrected down in the next quarter.

[mrsmith]

“... said Jennifer Lee, senior economist at BMO Capital Markets. “It is encouraging, to say the least, to see the October data coming in stronger, which is good news for the current quarter... (until we revise those numbers back down again next quarter too!)”

LOL!

[mandaladon]

"For now the U.S. economy looks to be moving in the right direction," said Paul Ashworth, chief U.S. economist.............So glad to hear this !!!

[mandaladon]

The government also said after-tax incomes fell by the largest amount in two years, reflecting high unemployment and lower pay raises...............but the economy is getting better says Barry.

[manic4organic]

To be corrected down in the next quarter.

Exactly. They keep trying to polish that turd.

[txrefugee]

That is a very unhealthy cut of 20%. There is no recovery in the Obamaconomy.

[FlingWingFlyer]

Woo Hoo.

[sport]

I don’t believe it. I do not think that it grew any.

[RetiredTexasVet]

Get the real growth number, subtract inflation, and the real number will indicate a recession racing towards a (dare I say it) depression!

[BobP]

Hope and Change.... Tragic.