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Candidates spar over economy report
October 28, 2012
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WASHINGTON: Republican challenger Mitt Romney used a government report showing tepid economic growth to hammer President Barack Obama less than two weeks before Election Day, but the report also had some good news for the President.

With the Commerce Department reporting a modest 2 per cent growth rate unlikely to make a big dent in unemployment, Romney said Obama inherited a bad situation when he took office and “made the problem worse.” He criticised Mr. Obama for failing to reduce borrowing and spending, protect entitlement programmes or reach deals with Republicans.

The report also provided ammunition for Mr. Obama: It showed the economy grew for the 13th straight quarter at a rate that though modest beat expectations. Mr. Obama claims progress during his term on fixing the economy, though conceding it hasn’t been fast enough, and says Romney’s policies would only make matters worse.

The economy remains the race’s dominant issue. But voters who are still undecided aren’t likely to be swayed by Friday’s mixed report from the Commerce Department, experts said.

Growth in the July-September quarter climbed slightly but was still too weak to stir significantly more hiring. The pace of expansion increased to a 2 per cent annual rate from 1.3 per cent in the April-June quarter, led by more consumer and government spending. This year’s third-quarter growth is slightly below the 2.2 per cent average pace since the recession ended in June 2009.

“For the average American, I don’t think changes in quarterly GDP” make a big difference in their perception of the economy, said Andrew Kohut, president of the Pew Research Centre. “It’s certainly good for the president that the number is not bad because that would resonate.”

With 11 days until the election, the economy is being kept afloat by revitalized consumer spending and the early stages of a housing recovery. But more than three years after the Great Recession ended, the US continues to struggle because businesses are reluctant to invest, and slower global growth has cut demand for American exports. The recovery is still the slowest since World War II.

The latest report did exceed expectations in GDP growth and showed some progress in consumer spending, which drives 70 per cent of economic activity.

Consumer spending increased at an annual rate of 2 per cent in the July-September quarter, up from 1.5 per cent in the previous quarter. And a survey by the University of Michigan released Friday found consumer confidence increased to its highest level in five years this month. That suggests spending may keep growing.

Obama took office during the worst downturn since the Great Depression and says his policies stabilised the economy later that year. He argues that his massive stimulus package and auto bailout helped it grow in 2010.

Romney vows to put his experience as a businessman to use to create 12 million jobs in four years in a country where unemployment only recently fell below 8 per cent for the first time since Obama took office. The Republican challenger borrowed a hopeful theme from Obama’s successful 2008 campaign, saying he and running mate Paul Ryan “can bring real change to this country.”

Associated Press

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