A Commerce Department report released Thursday that showed growth in the gross domestic product sent the stock market soaring, with the Dow Jones posting a nearly 200 point gain.
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.
This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org