The advance estimate from the BEA has GDP growing by 3.2% in the third quarter:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the fourth quarter of 2010, (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.
That's better than slower growth, but not enough to make up for past losses. Paul Krugman puts it this way:
growth at 3.2 percent closes less than 1 percentage point of that gap each year. So, yippee: we’re on track to restore full employment circa 4th quarter 2018. Why am I not happy?
Of the 3.2% total growth pace, 3.02 percentage points were contributed by personal consumption. Gains were also attributable to a nice improvement in exports. Net exports contributed positively to growth for the first time all year. But for the first time in almost two years, federal government spending joined state and local spending as a drag on growth. This trend will continue; generally speaking, future growth will have to come despite government cuts rather than thanks to government supports.
Cutbacks in federal, state, and local spending will provide a strong headwind to growth. We have a large gap to make up, and growth is not yet fast enough to get the job done in a reasonable amount of time. Thus, we need help with growth from the federal government -- balanced budget requirements and poor economic conditions tie the hands of state and local governments -- not a strong headwind working against us. So let's hope Congressional gridlock or good sense (unlikely) prevails and forestalls deficit reduction until the economy is on more robust footing.
[Also posted at MoneyWatch.]