Growth Reaffirmed but at a Slower Pace
Third quarter growth was in line with expectations: slightly better than in the prior quarter, but still lackluster.
The increase in the pace of consumer expenditures is somewhat encouraging, even as confidence remains restrained
Today’s report illustrated clearly the significant downturn in new housing in the wake of the expiration of the home buyer’s tax credit.
While recent data bolsters the case for avoiding a double dip recession in the near term, the rate of growth appears likely to remain sub-par.
The Fed has indicated their intent to provide further monetary stimulus to support the faltering recovery. Today’s report does not appear likely to meaningfully alter their views.
Given the magnitude of the recession, the initial boost in growth was underwhelming, and the slow pace of growth that the economy has since settled into suggests that job creation and income growth are also likely to remain tepid in the quarters ahead.