U.S. Economic Growth: Too Fast, Too Soon?

The U.S. Bureau of Economic Analysis has released preliminary estimates of the U.S. economy’s growth in the third quarter of 2009. The BEA reports third quarter growth of 3.5%, a far cry from the negative growth during the second quarter and 6.4 percent drop during the first quarter. The news is good…sort of.

One quarter’s estimates are not necessarily a sign of good times. As I point out in this guest blog post for the National Review’s blog “The Corner,” lots of uncertainties surround the stability of the estimate, whether the spending that drove these growth numbers was “real,” and whether these trends are long-term. I conclude:

We need to remember it took the National Bureau of Economic Research 12 months to officially declare that the economy was in recession because the data were so hard to read. It’s no different now. So, we will need to wait at least until Fourth Quarter GDP results are in before we can even make reasonable speculations about the economy’s health.

The complete numbers and estimates can be found in an excel file at the U.S. Bureau of Economic Analysis.

Also, my colleague Anthony Randazzo legitimately questions whether we may actually be entering a “lost decade” of variable but stagnant economic growth similar to Japan in the 1990s.