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The Commerce Department released GDP numbers today for the second quarter, and showed that the economy shrank less than expected for the April - June period.According to today's report, second quarter GDP figures dropped by 0.7%. Before the report, analysts had been expecting to see that GDP actually dropped by 1.1%, providing some fresh evidence that the economy will probably start growing again during the second half of the year.
During the first quarter of the year, the economy shrank by a whopping 6.4%, and during the fourth quarter last year that figure was 5.4%.
Earlier this month, Federal Reserve Chairman Ben Bernanke said that the recession is "very likely over", and most analysts agree that the economy did grow in the third quarter, estimating 3% growth.
The third quarter has been helped by the governments $787 billion stimulus plan, as well as the highly popular "cash for clunkers" program which gave a big boost to car dealers across the country.
While it is very encouraging to see GDP numbers improve, the big weight on most Americans shoulders is the job market. Unemployment continues to be at record levels, and is expected to continue to rise.
We saw just yesterday the impact that concerns of jobs is having on Americans, as consumer confidence took an unexpected dip in September. Until Americans start going back to work, it will be tough to feel too good about the current situation. There are currently around 15 million people out of a job, this has to start to improve for things to really start to turn around.
The decline in GDP in the second quarter, while less than expected, did make it the fourth straight quarter the economy shrank. This is first time the economy shrank four quarters in a row on record, going back to 1947.
What are your thoughts on the economy? Do you believe the recession is truly over, and if so how long do you think it will take before unemployment figures start to reflect the growing economy?
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Reader Comments (Page 1 of 1)
10-21-2009 @ 7:06AM
Trampolineman said...
Agree. The recession is technically over, and the Q3 figures will show growth. It has amazed me how far behind the real life 'on the ground' activity the commentators really are.
We felt the impact of the recession as it started, way before the banks collapsed and the commentators were behind the reality. I am sure they are now too, with continued dire predictions. the reality is that things are much better, and we ARE back in growth. Still behind 2007, and it will take a while to get back to the long term trend, but expect 2% next year.