Essay

EssayAlthough the U.S. recovery felt like it may have been stalling for some of the third quarter, the economy's growth was actually stronger than it was in the second quarter. Gross domestic product (GDP) grew at a 2.0% pace during the three months ending in September 2010, according to the Bureau of Economic Analysis. That nearly matches economist estimates of 2.1% growth and beats the second quarter's 1.7% pace.

GDP growth remains well below its rate from a few quarters ago, but it's actually higher than it was a year ago. It's in important to bear in mind, however, that this is just a first estimate. Two revisions will follow, and last quarter's GDP was ultimately 0.7% lower than the advance estimate predicted.
Before diving into the numbers, it's actually pretty easy to summarize the U.S. economy's performance in the third quarter. Americans spent more money, particularly on things like services and leisure. Businesses also ramped up their inventories. The trade gap didn't hurt the economy as severely as in the second quarter. That's all the good news. On the other side, there was a drastic contraction in the housing market. Government spending also grew at a slightly slower pace, as did private sector investment.
Although we hear businesses complain that consumer demand is weak, spending actually increased by 0.6%. It was responsible for 1.8% of the 2.0% growth in the quarter.

Spending on goods grew, but that growth was a little slower than in Q2. This was mostly due to weak growth in auto sales. One of the biggest reversals in consumer spending came from non-restaurant food purchases, which rose 0.9% after a decline in the prior quarter. Americans spent less on clothes and gasoline, however.
Services spending grew at a brisker pace than in the second quarter. Most of that spending came from utilities and health care. But recreation spending contributed the most to GDP growth since late 2006 and increased for the first time since early 2009. That's a pretty important result, as it shows American consumers are becoming comfortable enough with their finances to spend more on leisure.
Due to the strong growth of the US economy, US retail shows a positive sign of recovery from the 2008 crisis.
Second quarter 2011after-tax profits of U.S. retail corporations with assets of $50million and over totaled $17.7billion, up $1.6(±0.3) billion from the after-tax profits of $16.0billion recorded in the first quarter 2011,and up $1.3(±0.2) billion from the after-tax profits of $16.4 billion recorded in the second quarter of 2010.
Sales in the second quarter of 2011, at $577.4 billion, were up $22.9(±4.4) billion from the $554.5 billion recorded in the first quarter of 2011, and up $47.2 (±7.4) billion from the $530.2 billion recorded in the second quarter of 2010.

According to historical data, retail growth had a strongly positive link with the GDP growth. As the US economy started to recover from the recession, we have reasons to believe that the retail sector will experience further growth. We expect retail vacancies to continue to fall over the coming year at an extremely slow pace. Net demand had turned positive for three straight quarters (2010Q3 to 2011Q1), vacancy had stabilized, and rents were beginning to appreciate in most first-tier locations. We expect retailers to be in cautious growth mode throughout the majority of 2012 as the personal income is forecasted to increase during 2011 and 2012.

Essay 9.1 of 10 on the basis of 785 Review.