The American Pundit

Typical. The Obama Administration gets political benefit from the highly-publicized better number and then it’s quietly revised downward later on.

The government originally claimed the GDP grew by 3.5% but now we’re being told it was actually 2.8%. That might still be the best quarter in about two years, but it’s based almost entirely on artificial government stimulus that won’t be present in Q4.

The economy grew at a 2.8 percent pace last quarter, as the recovery got off to a slower start than first thought.

The Commerce Department’s new reading on gross domestic product wasn’t as energetic as the 3.5 percent growth rate for the July-September period estimated just a month ago.

The main factors behind the downgrade: consumers didn’t spend as much, commercial construction was weaker and the nation’s trade deficit was more of a drag on growth. Businesses also trimmed more of their stockpiles, another restraining factor.

The new reading on GDP, which measures the value of all goods and services produced in the United States — from machinery to manicures — was a tad weaker than the 2.9 percent growth rate economists surveyed by Thomson Reuters had expected.

One of the major numbers that had to be revised? Car sales. The administration pointed to the bump as evidence that Cash-for-Clunkers worked, but now we’re told it was actually half of the increase claimed. And even the Associated Press has to concede:

What’s not clear is whether the recovery can continue after government supports are gone.

In other words, the economy didn’t actually recover. The massive government spending artificially increased the GDP on a temporary basis. This economy isn’t built on concrete. It’s built on sand. Once the massive, unsustainable spending ends, we’re right back in the hole. That’s not a recovery. It’s a band-aid over a gaping wound.