The U.S. economy is a complicated thing, particularly as it struggles to recover from the recession
that began in 2007. That may help explain why one
number--the report that U.S. GDP grew by 3.2 percent in the first
quarter of 2010--is drawing such widely disparate reactions. From
cries of joy to lamentations of doom, here are the takes.
Buffett: We're Back! The Associated Press reports that the influential billionaire
"says the economy is finally starting to show signs of significant
improvement." The A.P. adds, "Buffett says any improvement before last
month had been slow, but March brought a real change, especially in the
U.S. and Asia."
- Not Enough For Recovery MoneyWatch's Mark Thoma frowns. "A 3.2 percent growth rate is not large
enough to make up for the lost GDP during the recession," he writes.
"While some are reading this as encouraging news, and positive growth is
certainly better than the alternative, a growth rate of 3.2% is not
enough to make up for lost ground. That is, the economy is currently
operating at below its potential level. A growth rate of 3.2% will keep
things from getting worse -- the distance between the actual level of
output and its potential level will not increase -- but the distance will
not decrease either."
What the Growth Will Change The Atlantic's Derek Thompson explains the effects. "So yes, things are
getting better. Inventories were replenished in late
2009, and consumers started spending them down in early 2010. We should
expect disposable incomes to start rising in the next few quarters as
steady consumer demand encourages businesses to hire again and to
full-time their part-timers. Then again, the housing market -- which
helped drive the last boom -- is still in the worst shape in the last 50
years. That's a heavy anchor."
- Voters Want to Hear About Employment The New York Times' Catherine Rampell writes,
"While the expansion in output was welcome, it still has not brought
the level of hiring growth needed to recover ground lost during the
recession. Speaking in the White House Rose Garden, President Obama
acknowledged that many Americans might find little comfort in Friday's
numbers because ''you're hired' is the only economic news they're
waiting to hear.'"
- This Is Good, But Could Be Better
Liberal blogger Matthew Yglesias writes,
"Look, a 3.2 percent rate would be strong performance for an economy
operating in a normal context. It's consistent with recovery. Everyone
who said the Obama/Bernanke/Geithner anti-crisis measures were going to
sink the global economy was wrong. But given the quantity of idle
resources and idle people in the United States, it should be possible
for us to put together several 5+ percent quarters in a row."
Short of Projections Conservative blogger Ed Morrissey recalls that
"Obama and Democrats insisted that the 5.7% annual growth rate in the
fourth quarter of 2009 showed that their stimulus plan had set the
American economy back on track for rapid growth and job creation. The
administration needed a big number for 2010 to allay fears that
unemployment would stagnate at the current high levels for the long
term. Unfortunately, they didn't get it, with the 3.2% annualized GDP
rate for the first quarter of 2010 falling below analyst expectations"
- Cause: Consumer Spending Time's John Curran writes, "American
consumers are finally opening up their wallets. Spending by consumers
rose by 3.6% in the first three months of 2010, more than double the
1.6% rate of the fourth quarter. That's the biggest gain in this gauge
in three years. More importantly, it is a subtle but significant shift
in the drivers of economic growth." Salon's Andrew Leonard
agrees. The Atlantic's Dan Indiviglio
explores this in-depth.
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