U.S. GDP grows 2.6 percent in the third quarter
TEXT OF INTERVIEW
STACEY VANEK SMITH: U.S. Gross Domestic Product grew 2.6 percent in the third quarter. That’s a bit higher than originally thought. GDP is a measure of all the goods and services the country produces. It’s considered the economic indicator.
Here to help us make sense of this is economist Richard DeKaser, with the Parthanon group in Boston. He joins us live. Good Morning Richard.
RICHARD DEKASER: Good morning.
VANEK SMITH: So — 2.6 percent. Is that number making you happy?
DEKASER: You know, I’ve got to tell you, this is about the more normal, unexciting figure you can imagine. It is not good, it is not bad, it is perfectly in the middle. Let me put that into perspective. The 1990s which were pretty good decades saw a GDP growth of 3.3 percent over the ten year period, the last decade which was not so good showed GDP growth of 1.7 percent, so this 2.6 number is right in between those two, and really represents what most economists now believe is perfectly consistent with our economy’s long term potential. In other words, people are constantly coming into the labor market looking for jobs. If we grown an economy at 2.6 percent, we will just be growing fast enough to absorb those new labor market entrances, and in other words, hold the unemployment rate stable at at whatever it’s level is.
VANEK SMITH: Will 2.6 percent growth be enough to pull us out of this recession?
DEKASER: First point is we are technically out of the recession.
VANEK SMITH: Oh, this is true, this is true.
DEKASER: This is true. The high priests of economist in Cambridge, Mass. have deemed the recession to have ended about a year and a half ago, the summer of 2009. So — we’ve been out of it almost a year and half. Unfortunately for most Americans it doesn’t feel like we’re out of the recession because most people judge their economy’s performance based on the unemployment rate which remains very lofty, so we’re going to have to do much better than 2.6 percent in order to get this 9.8 percent jobless rate moving back down in the vicinity of 5 or 6 percent which most people consider normal.
VANEK SMITH: Economist Richard Dekaser with the Parthanon Group, thank you.
DEKASER: My pleasure.
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