GDP growth 2.8% in fourth quarter of 2011

Attendees walk through the exhibit hall during the Macworld iWorld Expo at the Moscone Convention Center on January 26, 2012 in San Francisco, Calif. There was optimism in the economy from strong holiday sales, and GDP growth at the end of 2011 was 2.8 percent.

Stacey Vanek Smith: The U.S. GDP grew at a rate of 2.8 percent at the end of last year. Gross Domestic Product is a measure of all the goods and services the country produces; it’s considered to be the economic indicator.

Jill Schlessinger joins us now to help us talk about this. She’s editor-at-large for CBS/Moneywatch. Good morning, Jill.

Jill Schlessinger: Good morning.

Smith: So Jill, we just got word that GDP grew 2.8 percent in the fourth quarter -- good news? Bad news?

Schlessinger: Mezza mezza. It’s about the long term average growth for the economy, but it really is low for a recovery. Now the other part is, analysts had expected a growth of 3 percent. There were even some whispers, of, maybe just hopeful ones of: oh, it’ll be higher. So I think there’s a little bit of disappointment this morning actually.

Smith: Well Jill, what kind of growth would you have liked to see, and what would that look like on the ground in the economy?

Schlessinger: You know, if growth were above 3 percent -- and maybe even 3.5 percent -- for a few quarters in a row; some consistent growth, here’s what would happen: we’d see a general uptick in economic activity, maybe some more stores opening than closing, companies hiring. And really more importantly, confidence in both consumers and businesses.

Smith: What was holding us back last quarter?

Schlessinger: Well the big one appears to be business spending, on capital goods, that’s big stuff -- slowest since 2009. I think that has a lot to do with the European debt crisis so maybe if that gets resolved, it’ll tick up again in the first quarter.

Smith: Jill Schlessinger with CBS/Moneywatch. Thanks, Jill.

Schlessinger: Take care.

About the author

Jill Schlesinger is editor-at-large for CBS/MoneyWatch.

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