STATEMENT: CAP Economist Adam Hersh on Today’s GDP Report
Contact: Katie Peters
Washington, D.C. — Center for American Progress Economist Adam Hersh had the following reaction to the announcement of the third-quarter GDP numbers released this morning by the Bureau of Economic Analysis:
U.S. economic growth in the third quarter plowed forward at 2.8 percent, though the surge was driven almost entirely by an accumulation of inventories, which added 0.8 points to the headline growth rate. Underlying noninventory growth remained steady and too slow at just a 2 percent rate. The clearest headwind against a strengthening recovery remains the political obstructionism that has led to a sharp contraction in the contributions made by public spending and investment to the economy.
Today’s GDP numbers look back to where the U.S. economic recovery was in September—before conservative lawmakers shut down the federal government and threatened financial default in October, but at the peak of their nearly three-year crusade to force public spending cuts. The yoke of unnecessary austerity cuts are about to weigh heavier as the full blow of 2013’s cuts will mount in the fourth quarter and are set to cut even deeper in 2014. Congress could eliminate this fierce headwind on economic recovery today with the swipe of its gavels by replacing future sequester cuts with a growth-oriented approach to managing U.S. financial sustainability.
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