Daniel Indiviglio figures out why the growth rate had to be "revised downward," as they say.
... Spending was relatively strong in the third quarter -- it grew by the most since 2010. So demand is actually improving. What could be going on here is that firms aren't hiring aggressively enough to respond to that new demand, so they were forced to liquidate more of their inventory than expected. This would actually be a very positive development, as it implies that companies will have to hire more aggressively in coming quarters to keep up with sales growth. So we'll have to see how the economy does over the next few months. Although growth is certainly weaker than would be ideal, the reason for this revision isn't necessarily a signal of coming economic doom. It could just be that firms were too pessimistic and have already begun realizing that they must hire more workers to keep up with demand. ...The Atlantic
So were Obama's policies at fault or was it corporate decision-making -- corporate stick-in-the-mud atttitude towards hiring? Gee, looks like corporate decision-making to me.
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Brad Plumer drops the other shoe.
Already this morning, the contagion in Europe is starting to spread to once-safe countries like Austria and Belgium, which are seeing their bond yields spike to worrisome levels. And, as ... reported yesterday, the United States can expect a further fiscal drag on its economy next year if the unemployment benefits and the payroll tax cut expire (not at all unlikely at this point, given the supercommittee’s failure). If the economy was growing rapidly, we might have enough momentum to speed right over these bumps. But that momentum’s getting harder and harder to detect. ...Wonkblog, WaPo
