Economy Grows at Slightly Faster Pace Over Summer

(NECN: Peter Howe) One of the most closely watched barometers of the U.S. economy shows the economy has been growing a little faster this summer and fall than it was in the spring -- but nowhere near fast enough to begin appreciably bringing down the unemployment rate.

That's the key message from Friday morning's U.S. Commerce Department announcement on gross domestic product, the most widely watched quarterly report on the health of the economy.

Most economists' rule of thumb is that you need a year of solid 5 percent annualized economic growth to knock the unemployment rate -- now 9.6 percent -- down by a full percentage point.

But unfortunately, in the July-to-September quarter, the economy registered 2.0 percent annualized growth. That was better than the April-to-June quarter's 1.7 percent. And notably, consumer spending -- which drives about 70 percent of the economy -- was up by 2.6 percent, the biggest increase in that measure since late 2006.

The new report offers reassurance the U.S. isn't heading into a double-dip recession, as has been feared, and the Associated Press consensus estimate of economists is for 2.4 percent annualized growth in the October-to-December quarter.

But the bad news, especially if you are out of work, this is still an economy growing nowhere near fast enough to create jobs at the pace out-of-work Americans want.

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