This morning brings some good news for America and the world at large. After 4 consecutive quarters of the GDP shrinking, the unemployment rate rocketing to 9.5% and the financial markets flailing around in a complete mess the United States of America have managed to drag themselves up out of the dank depths of recession and post some exceptionally strong growth (given the circumstances). Of course it’s not all sunshine and rainbows over there yet, and Obama has recognised this with his recent speech on the matter:
Oct. 29 (Bloomberg) — President Barack Obama said U.S. economic growth in the third quarter affirms that the recession is abating, adding that the nation has “a long way to go” to fully recover and reduce unemployment.
He said a Commerce Department report that the economy grew at a 3.5 percent pace in the third quarter, after shrinking for four quarters, is “welcome news and an affirmation that this recession is abating.” It isn’t enough, he added.
“The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we’re creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well,” Obama told business leaders in a speech on the White House grounds.
He’s being cautious in trumpeting this as a victory for himself and his party and this is with good reason. Right now the last thing that any economy needs is uncontrolled growth as that will just get us back in the same situation in a very short period of time. Right now this serves as an indicator that the work the Obama administration has done in order to combat the financial troubles experienced in America worked and the lessons of the past have not gone unheeded. It would seem that all the naysayers about the various stimulus packages will have to take another look at what they’ve said as it appears that Obama’s ideas have worked despite their vitriol.
Hopefully this is the kind of indicator that will prompt companies to start rethinking their strategic direction. For the last few years most of them have been in at least one form of damage control or cost reduction scheme in order to stay in business. This is of course what has lead to the high unemployment figures that are currently plauging the USA. A few quarters of consecutive, small growth will see most businesses rework their directions from “staying alive” back to business as usual and this will easily be tracked in the unemployment rate. In fact the last 3 months have seen a drop in the unemployment rate of 0.2%. It’s not much, but it’s definitely a start.
For as long as the GFC has been in effect I’ve always been very skeptical about how long its effects would last. Sure when you tallied up the dollar amounts that were lost or “potential loses” the situation looked extremely grim, much worse than the great depression. The knowledge of past recessions however let us ride through this with a few bruises but wiser for the experience. One good thing that’s come of this is tighter regulation of the banks in the USA, something which could have prevented this disaster from happening in the first place.
Overall this is great news for the world at large. When the giant of America was toppled by its own system the world rightly went into panic. After battling naysayers, unwilling congress critters and the scathing eye of the media Obama has won himself a hard fought victory for all of America and this will resonate with the public.
Like my fellow blogger said, he’s going to have no trouble coasting into re-election come 2012.