Thursday, October 29, 2009

Economic Rebound?

The big news of the day is that economy grew at an annualized rate of 3.5%, beating expectations of 3% growth. Today, and over the next few days, we will be bombarded with analysis of this GDP report. A good initial summary of some of the reaction is here.

My take on this news is pretty simple; it beats the heck out of a shrinking economy. A year ago, when we were in the middle of the financial meltdown, anyone who predicted growth in the third quarter of 2009 would have been laughed at. Of course, the picture is not that rosy. Unemployment is too high, too much of the recovery is based on short-term government spending, etc.. However, we needed to start somewhere, and it appears that the recovery has indeed begun.

Only time will tell how solid and lasting the recovery will be, and there will continue to be significant disagreement about that as we move forward.