Call it the 2% trap. The first estimate of third-quarter gross domestic product for the world’s largest economy arrived at 2% on the nose. (The bar all the way at the right.) That’s better than the 1.8% annualized rate that economists expected according to data provider FactSet. And slightly faster than the 1.3% rate the economy clocked during the second quarter. But the report did little to change the view among economists and corporate chiefs that the US seems somewhat stuck with middling growth for the foreseeable future.
The report was driven by consumer and government spending and the housing sector. Again we see evidence that the US corporate sector is sitting on its hands ahead of the election and the looming threat of the fiscal cliff, with relatively low business investment and spending on inventory a drag on growth.