Today’s GDP report confirms that the US economy continued to decline in the second quarter of 2009, contracting at a 1.0% annual rate. The economy has contracted faster over the past year than at any time since 1947. Today’s report did contain some good news, however: The American Recovery and Reinvestment Act (or ARRA) gave a significant upside boost to growth in its first full quarter of implementation. Although the Recovery Act wasn’t enough to push economic growth rates into positive numbers, it most likely added 3 percentage points to GDP growth, which, in turn, likely created or saved around 720,000 jobs. It is now even clearer that more help is needed from Congress and the administration, in the form of public relief and investments. EPI economist Josh Bivens said, “The economy is still taking on water at a fast clip, but at least the recovery act has begun bailing. Now the question is — Will Congress and the Administration act before the boat sinks?”
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