Explaining Southern California's economy

U.S. GDP growth is revised lower, but that's no reason to panic — yet

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.

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Visual Aid: Southern California lagging in metro GDP growth

This chart is disturbing. It's from the Bureau of Economic Analysis and it summarizes percentage change in real GDP growth for U.S. metropolitan areas from 2009 to 2010. Have a gander at the lower left hand corner of our fair mainland (not Alaska and Hawaii). That large area of middling and lower-than-middling improvement is SoCal. In fact, the entire state managed a feeble performance — with the obvious exception of that little bit of overachieving dark blue: Silicon Valley.

For contrast — and tale of two years — here's the 2009 chart:

Source: BEA

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