via The Atlantic
Finally, the U.S. gets a solid dose of good economic news: GDP grew at an annualized rate of 2.5% in the third quarter. After growing at a rate of just 0.8% in the first half of the year, that’s pretty welcome news. The quarter’s growth rate was the highest in a year. This appears to show that the recovery is back on track. Unfortunately, that track was a jobless recovery.

Today’s report probably comes as a relief to many: a double dip no longer appears to be imminent. But that doesn’t mean the U.S. recovery is suddenly strong and enduring. At this point, it’s neither.

While 2.5% growth is better than a weaker result, it isn’t enough to count on a much brisker rate of hiring. After the U.S. grew at the same pace in the third quarter of 2010, jobs were added at the pace of just 139,000 per month in the fourth quarter. That isn’t enough to make a significant dent in the unemployment rate. As a means of comparison, when unemployment dropped from 9.2% to 8.3% in the fourth quarter of 1983, GDP growth was 8.1% in the third quarter.

Other obstacles also remain firmly in place for the U.S. economy. Consumer confidence continues to struggle. In the third quarter, Americans’ spending was responsible for most of the growth we saw. If it suddenly slows due to gloomy consumers, then GDP growth will fade as well. Although we’re seeing some progress in Europe, its problems are not yet entirely solved. Of course, it’s also important to remember that this is just the first estimate of third quarter growth. We’ll get two more revisions over the next two months.

We should be cautiously optimistic about today’s growth estimate. The proper response is an it-could-have-been-worse attitude about the quarter’s measure of economic activity. While it appears to show that the U.S. isn’t headed into another recession, it doesn’t indicate that the nation’s troubles are entirely behind it.

Read the full article here.