GDP in 3rd quarter rises to 3.5%

Is this good news or just a prelude to a double dip recession? Ed at Hot Air makes a good point:

Sales of new homes fell last month, and inventories are not growing. With the government tax credit expiring, those new-home sales and construction will likely fall off. The third-quarter growth in that area will almost certainly represent sales shifted from future quarters, which means that the next quarter will get negatively impacted from this growth.

One key indicator continued to move downward significantly, although Reuters only reports it in the final paragraph:

Business investment fell at 2.5 percent pace, with investment nonresidential structures dropping 9 percent, a reflection of ongoing problems in the commercial property market.

In other words, what we had in the third quarter was not long-term growth based on solid investment in business. We had a flurry of federal spending and consumer behavior predicated on highly temporary government interventions, like Cash for Clunkers and the homebuyer tax credit. That may be enough to make the administration look good for the next three months, but only for that long if they don’t stimulate real investment instead of using these gimmicky programs. If we have a double dip recession after these gimmicks end, Barack Obama won’t have George Bush to kick around any longer on the economy. He’ll own it after this.