Unempl oyment Rate
International trade, which has proven resilient
this year, continued to expand during the quarter.
With exports rising by 4.0 percent and imports growing by 1. 9 percent, the balance of trade was positive. However, along with growth in trade, prices of
exchanged goods also increased. Import prices, in
particular, have been growing at double-digit rates
for better part of 2011, with September’s prices 13. 4
percent higher year-over-year. Export prices rose at
a much slower pace, with September 2011 figures up
9. 5 percent from the prior year.
The other major contributor to economic
growth—government spending—was flat. Federal
spending increased 2.0 percent, driven by defense
expenditures, up 4. 9 percent. State and local governments slashed their spending 1. 3 percent as they
continued to face mounting deficits.
On the employment front, the third quarter witnessed a slowdown. Businesses cite general uncertainty, lack of demand and regulatory concerns as
the main reason for modest hiring. The number of
payroll jobs rose by 368,000 during the quarter.
Manufacturing, construction and mining maintained
a steady pace of growth. In a positive sign, professional and business services posted a net 100,000
new jobs during the quarter. The other contributors to employment growth were the education and
However, employment conditions remain far
from a pace that could support sustainable economic
growth. The first-time unemployment insurance
claims were stubbornly high at 412,000 per week,
during the third quarter. The figure should fall below
400,000 per week to ensure a meaningful, consistent job creation. In addition, the number of people
drawing unemployment benefits rose to 3.73 million
in the third quarter, from 3. 72 million in the second
quarter of the year. Not surprisingly, the unemployment rate spent the third quarter pegged at 9. 1 percent. It declined to 9.0 percent in October.
With the large specter of unemployment casting
a long shadow across the economy, consumers grew
weary. The consumer confidence index compiled by
the Conference Board—a measure that considers
respondents’ general feelings about the job market
and their finances—declined to39.8, a low not seen
since the first quarter of 2009, during the recession.
More troubling, consumers were pessimistic about
both the current economic conditions as well as their
Looking ahead, GDP growth will likely close the
year at an anemic 1. 8 percent annual rate. While the
holiday season is expected to bring a small jolt of
Britain Euro area India
Brazil China Russia
Source: Economist Intelligence Unit
Percentage, Annual Rate