Gross domestic product rose at a 2.8 percent annualized rate after a 2.5 percent gain the prior three months, a Commerce Department report showed today in Washington. The median forecast of economists surveyed by Bloomberg called for a 2 percent advance. Consumer spending climbed 1.5 percent, the smallest increase since 2011.
The biggest gain in inventories since the first three months of 2012 risks holding back production in the current quarter, which began with a 16-day partial shutdown of the federal government. Jobs data tomorrow are projected to show hiring slowed in October, helping explain why Federal Reserve policy makers are pressing on with stimulus.
“Growth is steady but not that great,” Jonathan Basile, an economist at Credit Suisse in New York, said before the report. “The shutdown will have a temporary effect on this quarter’s growth.”
Wonkblog's Neil Irwin dug into the numbers some more and found that an improving housing market, steady corporate investment, and increased state and local investment boosted GDP. Meanwhile, federal budget cuts and fearful consumers held back growth.
So the economy is growing... But it's growing more slowly than it should because of ongoing austerity. This is why the Federal Reserve has been holding back on "tapering" its bond buyback stimulus program.
And keep in mind that this was just before the Great G-O-TEA Shutdown S**tfest of 2013. We can't help but wonder if this was on Jon Runyan's mind recently. He was a top NFL offensive tackle who played for the Houston Oilers, Tennessee Titans, Philadelphia Eagles, and San Diego Chargers... Before getting elected to Congress in the G-O-TEA Wave in 2010. But all of a sudden and just before his 40th birthday, Rep. Jon Runyan has announced he's retiring from Congress.
[... O]ne New Jersey Republican said Runyan's frustration began early this year when conservatives blocked a vote on aid for superstorm Sandy – a storm that hammered his district – and continued during the recent government shutdown, which he opposed. Another GOP source said he had become frustrated with Washington's gridlock.
[Democrat Aimee] Belgard pointed to those same incidents in announcing her run.
"We have more political gamesmanship and irresponsible discord than I can ever remember in Washington," Belgard said in her announcement. "We need a change from the ego-driven politics that shutdown the government and brought our nation to the brink of default."
As we discussed yesterday, G-O-TEA Culture Warriors are having way too much fun grinding Congress to a halt and holding back economic recovery. While they play with their austerity fetish and refuse to accept the America of the 21st Century, the rest of us are wondering why we can't already give this economy a chance to heal and put more people back to work. Apparently, this was even becoming too tough for a former star football player to tackle.
As usual, Congressional Republican "leaders" are dismissing Senator Harry Reid's helpful advice. That may turn out to be a big mistake. Their obstruction agenda isn't impressing anyone. It's time for them to grow up.