G.D.P. gain in third quarter points to some improvement
Last week’s Commerce Department report that the gross domestic product increased in the third quarter by a hefty 3.5% on an annual basis was favorable news for grain-based foods in much the same way as it bolstered the overall economic outlook. The July-September increase, exceeding earlier forecasts, followed four consecutive quarters in which the G.D.P. declined. The latter string of downturns was the longest since the start of these compilations in 1947, serving to underscore the severity and broad dimensions of this recession.
Any enthusiasm that the recession was at last ending and gains were ahead was tempered by the way this turnabout results from government efforts, not the rebound in consumer spending that is so important to grain-based foods and the economy at large. Special incentives that spurred auto buying as well as housing starts received most of the credit for the rebound. Outlays on food and clothing gained just 2%, contrasted with an astounding 22% for consumer durable goods like autos.
Third-quarter numbers showed how concerns of consumers about jobs and of employers about business prospects feed on each other in weighing on the economy. As forecasts of unemployment point to a rise from the current 9.8% jobless rate, any marked change in consumer spending patterns depends on an unknown future. Attention in Washington is turning to targeted interventions aimed at expanding jobs along with hopes for benefits from the $787 billion stimulus package.