The gross domestic product for the U.S. climbed 3.5 percent in the third quarter, signaling the unofficial end – in the eyes of some economic analysts – to the recession, which has plagued the economy since December 2007.
The climb in GDP was expected but it actually better than conjecture – 3.2 percent. The news signaled a temporary spike on Wall Street, beginning Thursday. Unfortunately, GDP growth is only the first step in a long series of events necessary for an economic recovery.
Economists are crediting exports, consumption, homebuilding and mostly government spending. The numerous stimulus efforts unleashed by the federal government have inspired consumer behavior, especially in buying cars. Some have singled out the Cash for Clunkers program for boosting the GDP by 1.66 points.
However, the effect of the GDP’s growth on the general economy is still debatable. The job market is still heading in the wrong direction, as few are expecting a decrease an unemployment when the October statistics are released. A majority of people still think the economy is headed in the wrong direction and has yet to hit bottom.
Therefore, consumers are still needing a huge incentive – perhaps from the government, in the case of Cash for Clunkers – to part with their hard-earned dollars. For industries such as tanning, it does not appear that discretionary income to be spent on “luxury” expenses has increased.
Forbes: GDP Grows by 3.5%