IBJNews

U.S. economy grew anemically in third quarter

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

  • 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.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

ADVERTISEMENT