At the end of trading on Friday, however, that gain was erased by another Commerce Depart report that said consumer spending dropped in September by the largest amount in nine months, according to the the New York Times.

The Dow Jones dropped nearly 250 points, or 2.5 percent.

The U.S. economy expanded by 3.5 percent between July and September, and household purchases rose 3.4 percent, according to the Thursday Commerce Department figures.

Much of the growth was attributable to government incentives such as the “cash-for-clunkers” program which spurred consumer spending on automobiles and an $8,000 tax credit for first-time homebuyers.

Purchases of durable goods, including autos, jumped 22 percent, and residential construction rose 23 percent in the last quarter, reported Bloomberg News.

That trend was reversed when the cash-for-clunkers program ended in September, said the New York Times.

Unemployment figures also remain dismal, leading President Obama to say the economy has “a long way to go” before it makes a full recovery.

The jobless rate reached a 26-year high of 9.8 percent in September, up from 7.6 percent when Obama took office in January, Bloomberg reported. Many economists predict the unemployment rate will top 10 percent in 2010.

Before that number was released, many analysts predicted that the economy would shrink at an annual rate of 1.5 percent from April through June, said MSNBC.com.

The second quarter GDP is a huge improvement from the first quarter of the year, when the real gross domestic product shrank by 6.4 percent.

President Barack Obama said the country had “stepped away from the precipice” of an economic collapse akin to the Great Depression.

Small businesses complain that mandatory wage hikes hurt their bottom lines, forcing them to raise prices or impose cost-cutting measures, including layoffs. But the National Federation of Independent Business said that most businesses pay more than minimum wage to attract the best workers, and 21 states already have minimum wage requirements above the federal level, according to MSNBC.com.

While economists believe the wage hike will have little effect on the economy overall, teens and young adults, as well as workers in rural or poor areas, will likely suffer the most when employers make hiring decisions, said MSNBC.com.

Phyllis Knueven, who owns a grocery store in Illinois that employs several teens, told MSNBC.com she could hire more experienced and flexible adult workers for $8 an hour.

Teens and young adults have already been hit hard by the recession; the June unemployment rate was 24 percent for 16- to 19-year-olds and 15.2 percent for 20- to 24-year-olds.

Mexico’s finance secretary last week said the government will pump $1.3 billion in stimulus money into the economy. The government will temporarily cut health insurance payments for small businesses and reduce taxes for airlines and cruise ships, according to the Associated Press.

Because of the flu scare, many airlines have canceled flights to Mexico and hotel occupancy rates have been cut nearly in half.

The president said of the nation’s most successful businesses, such as Google and McDonald’s, began as small ventures.

Obama said small businesses are responsible for half of the nation’s private sector jobs and deserve support from Washington, the Associated Press reported.

His economic recovery plan would help small businesses pay off private loans, Obama said.