US GDP Jump Hollow if Unemployment Keeps Rising

News that the US gross domestic product jumped 3.5% in the third quarter cheered investors and others, but the cheers will ring hollow if unemployment keeps rising, John Authers writes. Consumer spending rose even as disposable income fell—“ not a pattern that can be sustained for long, and it is inconsistent with the need for US families to pay down their debts,” he notes in the Financial Times.

Authers credits Cash for Clunkers and other government programs for sparking higher consumption—programs that won’t continue much longer. And while consumer optimism may be buoyed by the news, other data out today show that though the unemployment rate is rising more slowly, it’s still rising faster than before the recession began.
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