A closer look at last quarter’s numbers
TEXT OF STORY
Scott Jagow: The economic numbers out this morning look pretty good at face value. The government says GDP grew at a rate of almost 2 percent last quarter. That was better than the first quarter, so by the numbers, the economy’s not shrinking. But it’s a little suspicious, given all the other things going on. Marketplace’s Janet Babin has more from North Carolina Public Radio.
Janet Babin: Government stimulus checks gave the U.S. economy a bit of a boost in the second quarter. Or maybe it was those income tax refunds.
Peter Morici’s an economist and business professor at the University of Maryland:
Peter Morici: They made a big difference in May. Retail sales really jumped that month. A good deal of the money was saved however, and spending didn’t continue into June and July.
Morici says any growth from the stimulus checks is unsustainable and won’t be enough to turn the economy around long-term. Instead, Morici says we need to tame the credit crunch and become more energy independent.
Morici: Our huge consumption of gasoline, the payments for that go abroad, and the broken banks in New York, which have created a shortage of credit.
That’ll continue to shrink the job market. We also learned this morning the number of workers filing claims for unemployment insurance soared to the highest level in more than five years.
I’m Janet Babin for Marketplace.
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