The Commerce Department reported that real gross domestic product in the U.S. during the second quarter rose at a revised annual rate of 1.3 percent, up from a previously reported estimate of a 1.0 percent annual rate. This is the third and final estimate for economic growth during the April-to-June period and it will be followed by the highly anticipated “advance” estimate for third quarter growth in late-October.
Consumer spending rose at a 0.7 percent annual rate, up from the previously reported 0.4 percent increase, and spending on non-residential construction projects was revised upward while government spending was less than previously reported.
Unfortunately, growth rates seen in recent quarters are more reflective of population growth rather than a healthy economy that continues to expand at a faster rate and, as such, will do little to reduce the unemployment rate.
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Can economies always continue to “expand” (exclusive of population growth)? Will there be a point of diminishing returns?
If real incomes and productivity were stable, would that be terrible?
(assuming you started from a strong position to begin with, that is)
Some argue that, ultimately, all you get in economic growth is the population growth – that, in the end, all the economic growth from credit expansions and productivity gains end up getting reversed and you revert to the population growth mean (like we’re doing now).