We're not out of the bad economy but it's still reasonably good growth all things considered.
US economic growth increased at its fastest in a year in the third quarter as consumers and businesses set aside fears about the recovery and stepped up spending, creating momentum that could carry into the final three months of the year.NOTE FROM JOHN: GDP needs to rise more than 2% in order to take a bite out of unemployment. Some say 2.5% or even 3% is necessary. As Krugman explains, this is because more people are entering the labor market as our population grows (so we need more jobs for them just to break even, or the UE rate will increase) and productivity keeps increasing, so employers can do the same work with fewer employees. In the current case, people are saying that the 2.5% growth isn't enough to decrease unemployment.
At the same time, slightly fewer people sought unemployment benefits last week, though level remains elevated above 400,000.
Though part of the increase came from the reversal of temporary factors that had restrained growth, the expansion was a welcome relief for an economy that looked on the brink of recession just weeks ago.
