Third-Quarter GDP Number Revised Down

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Huffington Post

The economy is growing modestly, with consumers too wary about spending to invigorate the recovery.

That's the picture that emerged from reports Tuesday on the economy and the confidence of consumers, who power 70 percent of it.

Unemployment and tight credit have sapped shoppers' willingness and ability to spend freely as retailers enter their crucial holiday season. And Americans are expected to grow more cautious about spending next year. That would make for a plodding recovery.

The economy grew at a 2.8 percent rate last quarter, a significant revision of initial figures putting the growth rate at 3.5 percent. Forecasts for the current quarter are for similarly lackluster growth before a drop-off next year.

"It's hardly a rip-roaring recovery," said Stuart Hoffman, chief economist at PNC Financial Services. "Usually coming out of a recession you get growth more like a rodeo bull -- at a pace of 6 or 7 percent in the early quarters of recovery. That isn't happening. It is coming out of the stalls more like a fat cow."

New York Times columnist Paul Krugman sounded more dire. "This is really quite grim. At this growth rate it's far from clear that we're doing anything to reduce the output gap -- the gap between what the economy could produce and what it's actually producing. Correspondingly, there's no reason now for even a bit of optimism on unemployment."

Third-Quarter GDP Number Revised Down