The top line news: The Commerce Department's first stab at estimating third quarter GDP: it "increased at an annual rate of 3.5 percent." That's after declining 0.7 percent in the second quarter and 6.4 percent in the first quarter.
Economists, politicians and bloggers will be picking apart the numbers all day, but for now, the simplest interpretation is this: It's the first quarterly growth in more than a year, and stimulus spending was undoubtedly a factor.
Stimulus spending may also have peaked in the third quarter, so the pressing question immediately becomes, where do we go from here? There's not much encouragement to be gained from the weekly jobless claim numbers; new claims declined fractionally from the previous week. October's unemployment numbers could push the unemployment rate to ten percent, which will pose a politically uncomfortable question: What good is GDP growth, if it comes without jobs?
UPDATE: Christina Romer, chair of Obama's Council of Economic Advisers, speaks directly to this question in a statement released today:
"After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the U.S. economy is moving in the right direction. However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered. The turnaround in crucial labor market indicators, such as employment and the unemployment rate, typically occurs after the turnaround in GDP. And it will take sustained, robust GDP growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve."