For Immediate Release: Friday, October 26, 2012
Contact: Phoebe Silag or Donte Donald, news@epi.org 202-775-8810

Inadequate GDP growth continues in third quarter

According to today’s data release from the Bureau of Economic Analysis (BEA), gross domestic product (GDP)—the broadest measure of the nation’s economic activity— grew at an annualized rate of 2.0 percent in the third quarter of 2012, a slight acceleration from the previous quarter’s 1.3 percent growth rate. The detailed analysis in today’s GDP Picture shows that since the beginning of 2011 the economy has grown at an average annualized rate of less than 2 percent, a pace slightly below the sum of trend growth in the labor force plus productivity. This is a rate of growth that has historically put no sustained downward pressure on the unemployment rate. Further, the continued deceleration of business investment in equipment and software provides more reason to worry, with spending essentially flat in the third quarter.  While this category of business spending had been a source of strength in the U.S. economy for most of the recession, it has begun decelerating in the last year and is unlikely to be reversed by any policy changes besides boosting other components of demand.

Data from the Bureau of Economic Analysis’ GDP report are updated quarterly on The State of Working America website.

###