Economic Growth in the Third Quarter is Revised Lower

blr-editor | November 22, 2011 | Comments (0)

The economy is still expanding, albeit slowly

The economic growth in the third quarter has been revised downward to an annual rate of 2.0% in the third quarter of 2011, based on the second estimate from the Bureau of Economic Analysis.

The original or “advance” estimate of gross domestic product or GDP was 2.5% and the new estimate is based on more complete source data. In the second quarter, GDP increased 1.3%. While the slower growth is somewhat disappointing, the report still shows an economy in expansion.

The key to future economic growth may depend more on what eventually happens in Europe, specifically if their debt crises can be contained or if they lead to Eurozone defaults and a global recession.

In the meantime, President Obama has forsworn allowing Congress to change the “sequestration” rule calling for across-the-board cuts of $1.2 trillion following the failure of the congressional super committee talks over the weekend to agree on a path to making the cuts.

This sets up a series of fights between the Republicans and the President over coming economic decisions such as extending the payroll tax reductions and unemployment benefits into 2012.