The advance figures for 3rd quarter Gross Domestic Product (GDP) were released this morning, and they indicate that the U.S. economy grew at a annual rate of 3.5 percent.
The growth appeared to be spread over most sectors of the economy with durable goods expenditures (mostly motor vehicles), investment (mostly inventory changes), and federal government spending leading the way. Exports were up strongly, but imports rose even faster, meaning that trade was a net negative. Spending by state and local governments was also down.
The figures mean that the economy has turned the corner and that the Great Recession has ended, at least for now. While the news is good, it's important to remember that the level of output is still substantially (2.3 percent) below where it was a year ago. Foreclosures, bankruptcies, and bank failures continue to mount. Unemployment is expected to continue rising into next year. And at some point the government has to take its foot off the fiscal and monetary accelerator pedals.
It will be a while yet before the growth in the economy translates into better outcomes for many businesses and households.
Still, a recovery beats the alternative, nu?