The newly released GDP numbers fell a little short of expectations, but given the larger trajectory, it was at least encouraging to see the domestic economy moving in the right direction in the final three months of 2011.
The American economy picked up a little steam last quarter, with output growing at an annualized rate of 2.8 percent, the Commerce Department reported Friday.
The pace of growth was faster than in the third quarter, when gross domestic product expanded at an annual rate of 1.8 percent.
The fourth quarter was easily the best three-month period of 2011, and the strongest the U.S. economy has seen since the spring and early summer of 2010.
It’s important to realize, though, that 2.8% growth is hardly a breakthrough or evidence of a robust recovery. Under normal conditions, a figure like this would suggest the economy was fairly healthy and growing at a steady pace, but therein lies the point: these are not normal conditions. Given the severity of the Great Recession, and how much ground there is to make up, we’d much prefer to see a significantly higher number.
This should be of particular interest to policymakers, who may be tempted to see stronger growth as an excuse for inaction – or worse, austerity measures intended to slow the economy down on purpose. The fact remains that we’re slowly crawling out of a ditch – taking money out of the economy and ignoring high unemployment may very well push us backwards. This is especially true in light of the ongoing risks posed by outside economic forces beyond the nation’s control.
With that, here’s a chart showing GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.