GDP growth positive -- but unimpressive

(CBS News) The latest report on the U.S. economy shows the recovery is still weak, but starting to pick up.

The government says the economy grew at a 2 percent annual rate in the third quarter of the year. That's up from one-point-three percent in the second quarter.

But economists say it takes several quarters of growth of more than 2 1/2 percent to put a dent in unemployment.

Economy grows 2%: Consumer, government spending up
Third quarter GDP: Economy grew 2 percent

From its storefront in Plainfield, N.J., E & A Restaurant Supply ships out everything from stoves to plates and silverware.

Joel Green of E & A Restaurant Supply
Joel Green of E & A Restaurant Supply
CBS News

says restaurants are opening again and that's been good for business.

"Things definitely have picked up," Green said. "But it's been fairly strong all the way since April up until this point."

Green said the uncertainty surrounding the election is making business owners more cautious. But he likes the direction his business is headed.

"If it keeps rollin' the way it is, I see it being strong," he said.

The 2 percent growth in the economy in the third quarter was fueled in part by consumer spending, which rose 2 percent, and by a housing market that's showing increasing signs of life.

But a 13 percent jump in defense spending by the government played the biggest role. Without that, increase the economy's growth rate would have been only 1.4 percent.

Still, a 2 percent growth is not something financial experts are getting excited about.

"I don't think anyone's doing a victory lap on the economy," said Sean West, who studies politics and economic policy for the Eurasia Group.

West said the numbers have something in them for both campaigns. President Barack Obama can claim the economy is growing, but Gov. Mitt Romney can claim its not growing fast enough.

"Voters basically have drawn their conclusions about the economy already," West said. "So the impact that a GDP number can have or the final jobs report on the Friday before the election is going to have is won only at the margins. Now this election is close enough that the margins matter."

As West mentioned, the last unemployment report before the vote comes out a week from today. A surprise in either direction could influence the outcome of the election.

  • Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"