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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. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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