Today’s GDP report shows slow growth. It isn’t declining growth so technically is not a recession, but not enough growth to lead to job gains.
The United States economy grew at an annual rate of 2 percent in the third quarter, the Commerce Department reported Friday, as it struggles to gain any momentum for a sustained recovery.
. . . An economy growing at a sluggish, 2 percent, nearly all economists agree, cannot produce nearly the demand needed to bring down the nation’s painfully high 9.6 percent unemployment rate. And the trade gap remains wide, as imports outpaced exports.
Dean Baker writes at the Center for Economic and Policy Research that trade problems subtracted 2% from our GDP . Surging Inventories Sustain Third-Quarter Growth,
Trade was a big negative in the quarter, subtracting 2.01 percentage points from growth. The 17.4 percent growth in imports swamped the 5.0 percent growth rate of exports. The deficit is likely to expand somewhat less rapidly in future quarters if the pace of inventory accumulation slows, since a substantial portion of inventories is imported.
We’ve got to fix trade. First, the exports just are not catching up to the imports. So it’s killing the economy.
More important to jobs, the “free trade” idea that we can just pack up a factory and move it away from the wage and environmental protections that we fought for, and call that “trade,” and then come back and say “agree to lower wages or we’ll send more jobs away” is just nuts. It is killing the economy, killing jobs, killing morale, killing families, killing communities and killing our future. Yes, a few are getting fabulously wealthy and using some of that money to swamp us with campaign ads and constant propaganda and fear and distraction over the media. But I haven’t met one single Tea Party support who wants this “free trade’ stuff. So come ON, people, stop listening to Limbaugh and FOX and scare ads and tell your Congress to stop this “free trade’ nonsense and rewrite our trade agreements!
Frank Sobatka describes one of the main reasons for the problem: