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Kimberly Amadeo

Economic Growth Still Not Enough to Create Jobs

By December 22, 2010

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The BEA kept the final estimate of GDP for the third quarter (July - September) at 2.6%. This is better than Q2's 1.7% economic growth rate, but still not the greater-than 3% rate needed to generate a lot of jobs (see analysis at Calculated Risk).

Businesses increasing their inventory levels contributed 1.61% of this growth. These higher inventory levels are because they see an uptick in demand. According to the October survey of businesses by the National Association for Business Economics, nearly 60% of businesses reported an increase in demand - the largest percent in five years. (Source: Bureau of Economic Analysis, Q3 GDP Report)

For a history of all GDP reports since 2007, see GDP Current Statistics.

What It Means to You

A 2.6% growth rate means the economy is definitely out of recession and not in danger of a double-dip. Still, you can expect slow growth for awhile. A high foreclosure rate is dragging the economy by stifling bank lending. Growth will be anemic, between 2-3%, for several more quarters.

One way to profit during a slow-growth economy is to stay focused on what value you provide to your customers. And, yes, even if you are a salaried employee working for a company, you have customers. They are your co-workers, your boss, and your company's owners - which could include stockholders. Stay in tune to their needs, and make sure they know the value you provide. This value is your competitive advantage and your brand promise.

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