U.S. economy picks up steam before Election Day

U.S. economic growth gained momentum to a moderate pace in the third quarter of this year, triggering starkly opposite responses from the Obama administration and the Republican presidential campaign. U.S. gross domestic product (GDP) grew at an annual rate of 2 percent in the third quarter, a welcome acceleration from 1.3 percent in the second quarter and was the thirteenth straight quarter of economic growth, said U.S. Commerce Department in a report Friday. The latest rate was slightly better than market expectations, but far from robust enough to make a significant dent in the high unemployment rate hovering at 7.8 percent. The increase of the nation's real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and residential fixed investment, the department said in its last such report before the Nov. 6 presidential election day. Real personal consumption expenditures rose 2 percent in the third quarter, compared with an increase of 1.5 percent in the second quarter, reported the department. Personal consumption accounted for about 70 percent of the total economic activity in the world's largest economy. Real residential fixed investment gained 14.4 percent in the third quarter, compared with an increase of 8.5 percent in the second quarter. Real federal government consumption expenditures and gross investment rose 9.6 percent in the third quarter, in contrast to a decrease of 0.2 percent in the second quarter, noted the report. The key economic numbers came less than two weeks before the election day across the nation, and Democratic and Republican campaigns were interpreting the data in their favor. The latest economic numbers were "discouraging" news, said Republican presidential nominee Mitt Romney at a campaign event in the Midwestern U.S. state of Iowa Friday, adding that U.S. President Barack Obama had promised that U.S. economic growth rate would have reached 4 percent by now. "Slow economic growth means slow job growth and declining take- home pay," said Romney. Romney restated his five-point jobs plan to create 12 million new jobs in the coming four years through measures such as cutting taxes, reducing government regulations, and boosting oil and gas exploration and development. Together with other economic indicators, this report provided further evidence that the economy was moving in the right direction, Alan Krueger, chairman of the White House Council of Economic Advisers, on Friday said in a blog article after the release of the data. To strengthen economic growth and spur job creation, Obama has proposed to Congress a plan to help state and local governments retain and hire teachers and first responders, bolster the construction sector, modernize the nation's infrastructure, and give small businesses tax cuts to encourage hiring, stressed Krueger, Obama's top economic advisor.