The country posted a gross domestic product growth rate of 2 percent for the third quarter, beating expectations of 1.8 percent. The number is still down considerably from the 3 percent considered necessary for a solid recovery and full employment.
Republican presidential candidate Mitt Romney, who has based his campaign on the failing economy, was critical of the growth rate.
“Today, we received the latest round of discouraging economic news,” Romney said in a statement, adding that “slow economic growth means slow job growth and declining take-home pay. This is what four years of President Obama’s policies have produced.”
In contrast, the Obama campaign felt much more confident about the numbers.
“While we have more work to do, together with other economic indicators, this report provides further evidence that the economy is moving in the right direction,” chairman of the president’s Council of Economic Advisers Alan Krueger wrote on the White House website, touting the 13 straight months of economic growth.
The Wall Street Journal reports that one-third of GDP growth was due to government spending, in particular, defense spending.
“With defense spending surging, overall government spending contributed 0.7 ppts to the GDP figure, the largest contribution since 2009 when the recovery was first taking hold,” Dan Greenhaus of BTIG LLC told the Wall Street Journal.
Abram Brown of Forbes sharply criticized this trend.
“There are big profits behind the business of warfare. Corporate giants like Northrup Grumman, Raytheon, Boeing and Lockheed Martin all stand to see significant problems if such a big customer—the U.S. government, that is—cuts back on orders,” he writes.
Romney has proposed to increase military spending, particularly for the Navy.
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