Should have gotten to this yesterday, but better late than never. And just in time for Black Friday, the traditional kickoff for the holiday shopping season!
The Bureau of Economic Analysis revised down its data for U.S. GDP growth in the third quarter. What was 2.5 percent, which was pleasantly surprising when it was announced, became 2 percent. So the economy grew in the third quarter, just not as much as was originally thought.
This isn't really a good thing — that 2.5 percent figure caught observers off guard and gave economists firm reason to believe that the economy isn't going to fall into another recession. But under the circumstances, 2 percent isn't terrible. And losing half a percentage point of GDP doesn't mean that we have to gird ourselves for a double-dip. In fact, it means that the economy continues to grow, a sign that if nothing else, unemployment won't climb higher than 9 percent.
However, let's not be foolishly optimistic. That 2-percent growth rate is still what you would grimly expect these days: sluggish. And more evidence that what we're currently muddling through is something I like to call "stuckflation" — a period of below-average growth (which after a postwar recession should be more like 5-6 percent) mated to high unemployment but without a lot of inflation. (High inflation would signal stagflation, which we haven't seen since the late 1970s.)
What's not clear is how long we can expect this level of poor growth to persist. It can't last forever and should move up into at least the 3-percent range soon. But there's a wildcard: If the government fails to extend the payroll tax holiday and decides not to extend unemployment benefits, that critical extra percentage point or two may take a while to appear.