3Q GDP: Is the Recovery Recovering?

The BEA's advance estimate of real GDP growth for the third quarter was 2.5% (annual rate).  That's in the same ballpark as the long-run trend rate of growth - i.e., its a pretty normal growth rate, consistent with maintaining a stable unemployment rate as the labor force and productivity rise over time, but not fast enough to dig the economy out of the hole (14 million unemployed) that its in.  It is, however, a significant improvement over the first two quarters of 2011, which saw growth rates of 0.4% and 1.3%.

Also, this puts real GDP back above its pre-recession (4Q 2007) peak; a milestone we previously thought had been attained at the end of 2010 until the estimates were revised downwards last summer.

More reaction: The Economist's "Free Exchange" blog,  NYT's Catherine Rampell, Calculated Risk, James Hamilton, Mark Thoma, RTE's round up of Wall Street "economists."