For the first time since the second quarter of 2008 the gross domestic product (GDP) rose from the previous quarter.
The U.S GDP rose at an annualized rate of 3.5 percent in the third quarter compared to the second, the U.S. Bureau of Economic Analysis revealed today. For all purposes this means the recession is over, though it’s not official until a group of academic economists known as the National Bureau of Economic Research (NBER) declares it.
Good news for job seekers, right? Well, it’s not bad news, said Robert Gordon, an economist and member of the NBER, in an article in The Economist.
Employment is still falling because, following the pattern of recent recessions, firms have slashed costs deeply so that productivity has grown even as sales have fallen. Profits seem to have turned around already and Mr. Gordon predicts employment will follow by the first quarter of 2010.
Gordon could be overly optimistic. Unemployment is still rising; a recent poll by YouGov found that “35 percent of respondents think the economy is getting worse; just 28 percent think it is getting better”; and White House advisor Christina Romer said she expects unemployment will remain “severely elevated” throughout the coming year, according to The Economist.
This said, no matter how you slice the data, an improving economy will lead to job growth; the only question is when and by how much.