US GDP Revised Up in Third Quarter, but Not All the Economic News Is Good

(Nov. 23) -- When it comes to the nation's economy, is the glass half full or half empty?

On Tuesday, the U.S. Department of Commerce revised its figures for how fast the nation's economy grew in the third quarter. GDP measured 2.5 percent, up 0.3 percentage points from the original estimates of 2.2 percent. A range of factors contributed to the revision, including strong consumer spending and healthy export sales.

GDP has remained in positive territory in each of the first three quarters of 2010, marking a year in which the nation began to wrest free of the grip of the worst recession in decades. In fact, the third quarter set a record for corporate profits, which came in at a whopping $1.66 trillion, the Commerce Department said.

The U.S. stock market has officially erased all the loses of the financial sector meltdown, and though Wall Street has apparently regained its swagger, the mood on Main Street remains decidedly less exuberant.

Reversing gains for the two previous months, home sales plunged in October, down 26 percent from a year ago, the National Association of Realtors announced on Tuesday. According to one industry analyst, however, the drop may prove to be short-lived.

"The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels," said Lawrence Yun, the chief economist at the National Association of Realtors. "Based on current and improving job market conditions, and from attractive affordability conditions, sales should steadily improve to healthier levels of above 5 million by spring of next year."

With national unemployment easing, but still hovering close to 9.6 percent, the fruits of the corporate sector's good fortune still have yet to materialize. At least one captain of industry, Warren Buffett, questions whether Americans should continue to hope for a trickle-down effect.

"The rich are always going to say that, you know, just give us more money and we'll go out and spend more and then it will all trickle down to the rest of you," Buffett told ABC's Christiane Amanpour on Sunday. "But that has not worked the last 10 years, and I hope the American public is catching on."

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