GDP growth 2.8% in fourth quarter of 2011

Jill Schlesinger Jan 27, 2012

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.

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