Advance Estimate of GDP Growth for the Fourth Quarter of 2011

(Click to enlarge graph) 

Report Released by Council of Economic Advisers

The following information was submitted by Alan Krueger, Chairman of the Council of Economic Advisers.

Today’s report shows that the economy posted its tenth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew at a 2.8 percent annual rate in the fourth quarter of last year. For 2011 as a whole, GDP rose by 1.7 percent, raising the level of real GDP 0.7 percent above where it was at the start of the recession in the fourth quarter of 2007.  While the continued expansion is encouraging, faster growth is needed to replace the jobs lost in the recent downturn and to reduce long-term unemployment.

Positive contributions to real GDP growth in the fourth quarter included consumer spending (1.5 percentage points) and fixed investment (0.4 percentage point).  Overall government purchases fell (4.6 percent), with substantial declines in Federal defense spending (12.5 percent) and State and local spending (2.6 percent). 

As President Obama has said, this is a make-or-break moment for the middle class, and those who are struggling to get into the middle class.  That is why the President announced on Tuesday his Blueprint for an America Built to Last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.

Krueger: 'While the U.S. Economy is Healing, the World Economy Continues to be in a Fragile State'

Statement on the Employment Situation in November

WASHINGTON, DC – Alan Krueger, Chairman of the Council of Economic Advisers, issued the following statement:

The recent employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but the pace of improvement is still not fast enough given the large job losses from the recession that began in December 2007.

Private sector payrolls increased by 140,000 in November and overall payroll employment rose by 120,000. The unemployment rate fell 0.4 percentage point to 8.6 percent, the lowest unemployment rate since March 2009. About half of the drop in unemployment in the household survey was due to a decline in the labor force (-315,000) and about half to employment growth (+278,000). Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 21 straight months, for a total of 2.9 million jobs over that period. Nonetheless, we need faster growth to put more Americans back to work.

While the U.S. economy is healing, the world economy continues to be in a fragile state and all economies are linked through trade and finance. In this environment, the President’s American Jobs Act is the right medicine to sustain and strengthen the recovery. In particular, with 13.3 million Americans still unemployed, and 43 percent of them unemployed for 6 months or longer, it would be a setback for the economy and American families if Congress were to allow extended unemployment benefits to expire at the end of the year. The President’s proposal to extend and expand the payroll tax cut for workers and small businesses also would provide a substantial boost to economic growth and job creation.

Sectors with employment increases in November included retail trade (+50,000), professional and business services (+33,000), leisure and hospitality (+22,000), health care and social assistance (+19,000), and manufacturing (+2,000). The temporary help services industry, which is often a leading indicator of future job growth, increased for the fifth month in a row, by 22,300. Sectors with employment declines included government (-20,000) and construction (-12,000). State and local governments lost 16,000 jobs and have shed 430,000 jobs since February 2010.

The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.

Krueger: 'We Need Faster Economic Growth to Put More Americans Back to Work'

Statement on the Employment Situation in October

WASHINGTON, DC – Alan Krueger, Chairman of the Council of Economic Advisers, issued the following statement today.

Today’s employment report provides further evidence that the economy is continuing to recover from the worst economic downturn since the Great Depression, but the pace of improvement is not fast enough.

Private sector payrolls increased by 104,000 and overall payroll employment rose by 80,000 in October. The unemployment rate edged down 0.1 percentage point to 9.0 percent, a level that remains unacceptably high.

Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 20 straight months, for a total of 2.8 million jobs over that period.

We need faster economic growth to put more Americans back to work. Today’s report provides further evidence for why it is so important that Congress pass the President’s American Jobs Act to put more money in the paychecks of working and middle class families; to make it easier for small businesses to hire workers; to keep teachers in the classroom; to put construction crews to work rebuilding our nation’s infrastructure; and other measures that will help the economy grow while not adding to the deficit over ten years.

The report underscores that one area that remains notably weak is the construction sector. That’s why it is disappointing that the Senate was not able to proceed to the infrastructure part of the American Jobs Act.

Sectors with employment increases included professional and business services (+32,000), leisure and hospitality (+22,000), retail trade (+17,800), health care and social assistance (+16,300), and manufacturing (+5,000). Sectors with employment declines included government (-24,000) and construction (-20,000). State and local governments lost 22,000 jobs and have shed more than 430,000 jobs since February 2010.

The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.

President Obama Announces New Economic Adviser

Nominates Alan Krueger to chair the Council of Economic Advisers.