Q3 GDP growth falls to 2.8%. Is recession really receding?

The U.S. economy is not recuperating as fast as it was supposed to said a report by the Commerce Department Tuesday.

Gross Domestic Product --the total value of goods and services in the economy for the third quarter is reported to be only 2.8 percent compared to 3.5 percent for July-September.

"It's hardly a rip-roaring recovery," said Stuart Hoffman, chief economist at PNC Financial Services. "Usually coming out of a recession you get growth more like a rodeo bull -- at a pace of 6 or 7 percent in the early quarters of recovery. That isn't happening. It is coming out of the stalls more like a fat cow."

Whatever little growth the economy made till now is due to contribution of the stimulus package. Cash-for-clunkers program was a smart option because it boosted spending which makes up more than 70 percent of our economy.

But compared to a year ago, GDP is down by 2.5 percent. The labor markets are still weak and unemployment is at record high, beating last 26 years data.

The construction business, which has been feeble since the recession, cause be a cause of the falling growth.

Both the government and Fed must take a look at the economy’s demeaning situation rather than announce more stimulus packages.

Also, according to the recent report, checking trade deficit and inflationary conditions is a must. The economy is definitely facing disinflationary pressures.

Paul Krugman, the famous columnist of the New York Times said, "This is really quite grim. At this growth rate it's far from clear that we're doing anything to reduce the output gap -- the gap between what the economy could produce and what it's actually producing. Correspondingly, there's no reason now for even a bit of optimism on unemployment."