Last year ended on an optimistic note, as GDP growth inched up to 2.8% in the fourth quarter (October-December). This was the best quarter in a year and a half, and is in the healthy range of 2-3%. However, growth for the year was only 1.7%, according to the BEA report. Neither growth rate is enough to put much of a dent in the nation's 8.5% unemployment rate.
Even though the economy is still in the expansion phase of the business cycle, slow growth will be a big campaign topic in 2012. The Republicans came up with many ideas to spur the economy in last night's Presidential debate in Florida. Most of them involved tax cuts and deregulation -- all hallmarks of supply-side economic theory.
What It Means to You
What areas contributed the most to growth? Motor vehicles, especially recreational vehicles which contributed .21% to growth. The restaurant and hotel industry contributed .28%. Computer software contributed .23%, while industrial equipment added .25% to the GDP growth increase.
Which sectors were a drag to the economy? Housing and utilities (no surprise there) were down .4%, while the financial services industry was down .16%. Non-residential structures, which saw an increase in the third quarter, detracted .21% from growth. (Source: BEA, Table 2. Contributions to Percent Change in Real Domestic Product)
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Comments
Now The United States of America has to build new E-C-O-N-O-M-I-C infrastructure from scratch starting all over again going back to 1774 and the drastic changes is need starting from people attitude and probably that does not happen in US because the most people in US living are immigrant and no body has any patriotism and no body cares.It is not a socialistic country and there will be no people co-operation of any sort at any time keeping in mind the world is not developed by ” one person” and it will not be.As the country is non-socialistic the people mentality is not to co-operate in any matter. The US is like a polished dictatorship.
Any comments Kim to the above.It looks Americans are all running out of the ideas to bring back the country in to shape and nothing is working.
I don’t agree, Chan. The economy is growing, although slowly. There are more jobs, although not a lot. The big problem is housing, which is difficult to fix.
It took 20 years of misguided economic policy to get us into this mess. It’s unrealistic to think we will get out overnight. But that doesn’t mean all is lost.
Kimberly
As a nation it is very hard to bounce back for the loss it occurred for the past 20 years misguided economy and this cannot be afforded for US li for the standard of living.Is it is not easy to overcome this.I agree definitely enjoyed my stay in US and it was smooth going. Earlier to 9/11 the life was very smooth throughout US and now the problems are mounting on.Do you agree to this.All the politicians and corporate were telling it is very hard to bring back the country pre 9/11 and that means it is almost 60 percent is lost.All I am telling is people as a whole should have been careful and think twice about the outcome of the business.Example after getting into Iran after nearly six years the government was telling there is no weapon of mass destruction after spending nearly one trillion dollars and it is been like this so many are there.After all this loss and misguided for 20 years as you say it is not very easy to bounce back and it will take twice than years to fix it.Some times people will be frustrated. It will take a long time to construct rather than destruction.Thank you and give your feedback.
I agree that it will take a long time, if ever, to get back to the kind of prosperity the U.S. had. Technological innovations are slowing down. A lot of people didn’t get educated as they should have. Money went into housing instead of investing in businesses. Basically, the boom was financed by debt, and now the bill is due.
However, perhaps the U.S. will shift into a less money-oriented culture. People are finding new ways to prosper. There are volunteer work banks, where people can barter their skills. A whole pool of the structurally unemployed are doing something to make a living and fill their time. What are the unemployed doing? I’m guessing it’s some kind of not necessarily illegal, but off the records economy. Just like during the Great Depression, they are making do.
As I say in my book “Beyond the Great Recession,” we are emerging into a new landscape. As the smoke clears, we can only see the charred remains of the old. But the green shoots are sprouting, and a new economy is being built.