Friday, October 30, 2009


"Sure, the economy's standing up on its own legs again, but for how long once the government stimulus starts to fade?" said Chris Rupkey, an economist with Bank of Tokyo-Mitsubishi in New York. "That's the million dollar question for the nation's unemployed -- all 15.1 million of them sitting idle, through no fault of their own."

What gives Rupkey and some other economists pause is that a large portion of the jump in consumption can be traced back to the government's "cash for clunkers" program that provided incentives to buy new cars.

Excluding motor vehicles, third-quarter GDP advanced at a more modest 1.9 percent pace. To be sure, that was a vast improvement, following four consecutive quarters of declining GDP, but it was dangerously close to stalling.

The turnaround in residential investment, which added to GDP for the first time since 2005, was also a bright spot, although it remains to be seen how much of that improvement was linked to government efforts to prop up the housing market."


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