SBE Council Chief Economist Puts Third Quarter GDP in Perspective

Today, Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), issued the following statement about the third quarter GDP numbers released by the U.S. Bureau of Economic Analysis:

"If you thought the economy had come to a standstill in the third quarter, then you might view the 2.5 percent third quarter real GDP growth rate as a positive. But if you understand where economic growth should be, this is just another quarter's worth of data confirming how poor this economic recovery continues to be.

"Let's put this in perspective. Since 1950, real GDP growth has averaged 3.3 percent. But over the past decade, growth has been very poor. Consider that real GDP growth from 1950 through 2000 averaged 3.7 percent, but real growth averaged a mere 1.6 percent from the first quarter of 2001 through the third quarter of 2011. That's less than half the rate of recent decades. And during this so-called recovery, which started in mid-2009, real GDP growth has averaged 2.5 percent. Keep in mind that during recovery periods, real growth should be registering in the 4.0 percent to 4.5 percent range.

"The U.S. is not destined to become like slow-growth Europe, with little job creation. But in order to get things back on track, we need a sharp change in policy direction. More regulation, higher taxes, and bigger government need to be replaced with regulatory relief and reform, substantive and permanent tax relief, and smaller government."