ECONOMY COMING BACK TO LIFE…. From Fall 2008 through Summer 2009, the nation’s gross domestic product retreated. The four consecutive negative quarters was the longest since the government began keeping track six decades ago.
It comes as something of a relief, then, to see the U.S. economy come back to life in the third quarter of 2009 — spanning July, August, and September — with GDP growth at 3.5%. It was the strongest quarterly economic performance in two years, and it came “without a major surge in inflation.” The three-quarter swing of 9.9% was the largest in three decades.
Despite conservative opposition to economic recovery efforts, the growth in the U.S. economy was “fueled largely by government recovery programs,” including the now-expired cash-for-clunkers program and the tax credit for first-time home buyers. The AP report added, “Brisk spending by the federal government played into the third-quarter turnaround.”
The piece went on to say, “The Commerce Department’s report Thursday delivered the strongest signal yet that the economy entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.” CEA Chair Christina Romer, however, added, “[T]his welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered. The turnaround in crucial labor market indicators, such as employment and the unemployment rate, typically occurs after the turnaround in GDP. And it will take sustained, robust GDP growth to bring the unemployment rate down substantially.”
And with that, here’s another home-made chart, showing GDP numbers by quarter over the last two years: