- The Washington Times - Friday, October 29, 2010

The economy kept growing, but at a tepid annual rate of 2 percent during the summer quarter — only slightly above the 1.7 percent pace set during the spring, the Commerce Department reported Friday morning.

Consumer spending — the economy’s main engine of growth — picked up slightly to 2.6 percent from 2.2 percent in the spring. But a big setback of 29 percent in housing construction after the expiration of a federal tax credit for home-buyers sent that fragile sectors to new lows. Housing had gained 25 percent in the previous quarter.

Growth remains “steady, if at a disappointing rate for many,” said John Silvia, chief economist at Wells Fargo Securities. He expects growth to remain modest, although picking up somewhat in coming quarters.

The report provided a last snapshot of the economy before the midterm elections. It is unlikely to change the outlook or impress voters, who remain deeply skeptical about the economic recovery that began more than a year ago.

“The most striking thing about today’s report on gross domestic product is that it shows that the U.S. economy is still smaller today than it was when the recession began — even more than a year after the recession officially ended,” said Josh Bivens, analyst at the Economic Policy Institute.

“This remains an historically slow recovery. Never since World War II has it taken so long to recover to pre-recession levels of GDP,” he said.

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