1. News & Issues
Kimberly Amadeo

BEA Drops Q4 GDP Estimate to 2.8%

By February 28, 2011

Follow me on:

The BEA 's second estimate of GDP for the fourth quarter (October-December) 2010 dropped to 2.8% from the advance estimate of 3.2 %. This is only slightly better than Q3's 2.6% economic growth rate, and lower than the 3% rate needed to generate a lot of jobs (see analysis at Calculated Risk).

Jolly holiday sales helped drive the growth, contributing 2.8%. The biggest drag? You guessed it - lack of residential construction. The overhang of foreclosed homes in the "shadow inventory" will keep economic growth from breaking out of a 2-3% range for at least this year. In most recoveries, residential construction leads the way, driving growth to a robust 4-5% level - enough to create lots of jobs.

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

What It Means to You

A 2.8% 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.

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.

Related Articles

Join me on | Follow me on

(Photo Credit:Bill Pugliano/Getty Images)

Comments

February 28, 2011 at 7:38 pm
(1) Ronald Grey says:

The February 2011 National Association for Business Economics (NABE) Outlook, released today, also says in addition to a tepid housing market, high unemployment will remain a worry for the rest of Barack Obama’s term.

Taken together the two factors are of special concern: Americans underwater with mortgages in the tepid housing market are less flexible to pursue jobs that may become available.

Sincerely,
Ronald Grey
Louisville, KY

Leave a Comment


Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.