You should relish today's news that GDP grew by 3.5% last quarter for two reasons: 1) Three percent growth is really good news, and 2) it probably won't last. This morning I explained why high unemployment will likely hold down GDP growth in the next few months. The Financial Times John Authers explains in even clearer terms why the third quarter of 2009 is an unsustainable blip in GDP.
The nutshell argument is this: Families' discretionary income actually fell between July and September even as consumption on durable goods skyrocketed. That's almost exclusively because of government stimulus programs like Cash for Clunkers. But C4C is over. The housing tax credit ends in a month. Jobless benefits are drying up for 7000 unemployed Americans a day. The third quarter of 2009 was a stimulus high-water mark, and the tide appears to be rolling out even as unemployment is expected to grow. That's not good news for a consumer economy. Go read Authers.
(Thanks to Charles Davi for the tip.)