The Commerce Department has revised third quarter GDP down, again. Unfortunately, what originally appeared to be fairly strong growth of 3.5 percent was first downgraded to 2.8 percent, and now again to 2.2 percent. While not that much of a difference, the point is that in the best case scenario we would be seeing evidence of a fast, robust recovery. 2.2 percent, inflated by stimulus measures like Cash for Clunkers, signals that a slower and weaker recovery is more likely.
James Pethokoukis guesses that mere 2 percent growth heading into the 2010 midterm elections translates inoto a “1994-esque” scenario with the Democrats losing 40-plus seats in the House and five-plus Senate seats. When he makes that prediction, though, he’s assuming a relationship between GDP growth and jobs that may not apply to the current scenario. If job growth lags behind even anemic GDP growth, I wonder where that puts the Democrats.
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