Economy on the mend?
Good news on the economy -- it appears President Obama's stimulus plan is working.
After a very scary year, in which the economy shrunk, financial institutions were shaken, and the economy seemed poised to fall off a cliff, things have rebounded.
The economy grew in the third quarter for the first time in more than a year, thanks to gains in consumer spending and home building -- courtesy of the federal stimulus program.
Bloomberg News reports that the world's largest economy expanded at a 3.5 percent pace from July through September, exceeding the median estimate of economists surveyed by Bloomberg News.
The stock market has had a good run -- though it has given back some of those gains lately -- and Americans are feeling a little more secure in their jobs and are willing to spend again:
Household purchases climbed 3.4 percent, the most in more than two years.
"A lot of this is thanks to government support," Kathleen Stephansen, chief economist at Aladdin Capital Holdings LLC in Stamford, Conn., said in an interview on Bloomberg Television.
"We still have major headwinds for the consumer. That worries me. The consumer, in fact private demand in general, is not ready yet to pick up the growth baton from the government."
In other words, things are looking promising, but we're not out of the woods yet.
The economy shrank nearly 4 percent in the 12 months to June, the worst performance since the Great Depression 70 years ago.
The stimulus came at a steep price -- though one that had to be paid to avoid a serious depression -- and the record $1.4 trillion budget deficit now limits Obama's options for more aid.
The "cash for clunkers" program was a huge hit, and was responsible for more than a third of the growth in household purchases.
Residential construction jumped at a 23 percent annual rate last quarter, the first gain in almost four years and the biggest since 1986, adding about a half-percent to the economy's growth.
Since the recession began in December 2007, the U.S. has lost 7.2 million jobs. Payroll cuts peaked at 741,000 in January before falling to 263,000 job losses in September.
Unemployment is expected to hit 10 percent nationally, but in Becker County it has dropped from a high of 11.7 percent in March and at last report was pegged at 6.4 percent for September.
Obama's stimulus plan has drawn a lot of heat for its cost, but we hate to think how bad things would have been without it.