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Economists encouraged by third-quarter growth

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The Commerce Department said Friday that the U.S. economy grew two percent in the third quarter, an improvement from the second quarter.

Substantial bumps in government spending — as well as homebuilding and improvement — fueled the gains. Consumer spending, the vast majority of America’s economy, also rose, despite the weak job market.

“Although that sounds good,” cautions economist Hugh Johnson. “It’s still fairly anemic when compared to other recoveries in the postwar period.”

It’ll take a lot more than two percent growth to really move the needle on jobs. Still, today’s GDP number was a notch better than most predicted. A small change can make a big difference.

“If you’re the incumbent president of the United States, it’s easier to defend a two percent number than a 1.9 percent number, because two is a heck of a lot better than one,” says Cary Leahey of Decision Economics.

But perhaps the most important number before Election Day appears in a week, when the unemployment rate comes out.

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