US Economy grows in 3rd Quarter

After contracting for four consecutive quarters, the US economy saw economic growth of 3.5 percent this past quarter. According to the Commerce Department, the upswing in economic activity was helped in large part due to increased consumer spending as consumers took advantage of government program to purchase cars and homes. Many of these programs such as “cash for clunkers” have ended or will end soon so it will be interesting to see if the economy can put back to back positive quarters. Most economists, including ourselves believe that this quarter’s growth will eventually mark the beginning of an economic recovery. This recovery does not look to be very robust as unemployment remains high and credit is still proving more difficult to get, but just getting some major positive news could boost our confidence and get the economy going again.
Perhaps best demonstrating the weak nature of this recovery is the current unemployment picture. The Bureau of Labor Statistics released the September unemployment rates for the Kansas City area. For the third straight month, Kansas City’s unemployment rate stood at 8.9 percent.
Employment has always been a lagging indicator. The economy will show real growth for several quarters before we can expect any real growth in employment. We are certainly not out of the woods yet, but we can at least begin to gain some confidence that we are on the right path.