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U.S. economy grew anemically in third quarter

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The economy grew at a slightly faster pace over the summer as Americans spent a little more freely.

The government reported Friday morning that the economy expanded at a 2-percent annual rate in the July-September quarter. It marked a slight improvement from the feeble 1.7-percent growth in the April-June quarter. Still, the economy isn't growing at a strong enough pace to make a noticeable dent in high unemployment.

Consumers boosted spending at a 2.6-percent pace. That marked the biggest quarterly increase since a 4.1-percent gain at the end of 2006 before the recession hit.

In addition, employment costs posted another modest gain in the July-to-September quarter with compensation for state and local government employees turning in the weakest performance in nearly three decades.

Employment costs for civilian workers rose 0.4 percent in the third quarter and are up just 1.9 percent for the 12 months ending in September, the Labor Department reported Friday. High unemployment following a deep recession continues to depress workers' bargaining power.

State and local government workers, who have been battered by shrinking budgets, fared even worse than employees of private industry. Their compensation was flat in the third quarter and up only 1.7 percent in the past 12 months.

Both were the weakest showings on records that go back 28 years.

The 1.9-percent 12-month rise in compensation for all civilian workers was little changed from a 1.8-percent increase for the 12 months ending in June. Those gains are significantly below the 3.3-percent increase for the 12 months ending in December 2007, the month the recession began.

With more than 8 million jobs lost from December 2007 to December of last year, employees have not had the bargaining power to demand higher wages.

For the third quarter, wages and salaries for civilian workers rose 0.4 percent, matching the second quarter increase, while benefits were up 0.5 percent, also the same as the April-to-June quarter.

Wages and salaries make up 70 percent of employee compensation while benefits, which include health insurance and pensions, make up the other 30 percent.

For state and local workers, the flat reading on total compensation in the third quarter reflected a 0.3-percent drop in wages and salaries and a 0.7-percent rise in benefits.

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  • Stimulus working in spite of GOP
    This is remarkable in light of the GOP organized plan to undermind the economy and make it fail just to get a political advantage in the election.

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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