Analysis of GDP by Bart van Ark, Chief Economist of The Conference Board

NEW YORK, Oct. 29 /PRNewswire/ -- The expansion in Q3 GDP (3.5%) shows we have
clearly begun to emerge from the trough. But there's still a long way to go,
and we still don't know enough about the sustainability of these recovery
signals. The comparatively good Q3 news is largely driven by temporary factors
like an uptick in consumer spending -- notably through the U.S. government's
"cash for clunkers" car sales subsidy program -- as well as an easing in
inventory rundowns.

Q4 could bring even faster easing in inventory rundowns that accounts for all
GDP growth (we forecast 3.1 percent). Consumer spending will fall flat during
the holiday season, and exports will recover more slowly than in Q3. Any
modest uptick in investments in equipment and software will most likely be
offset by continued declines in commercial real estate.

A less powerful inventory boost with no positive offsetting contributors may
well limit GDP growth to 1 percent in early 2010. We forecast growth to
improve only moderately, to around 2 percent, by the middle of 2010. The
savings rate will remain relatively high at 4.5 to 5 percent of disposable
income, dampening improvements in real consumer spending, investment and
trade.

SOURCE The Conference Board

Frank Tortorici, Director, Public and Media Relations, The Conference Board,
+1-212-339-0231, +1-908-875-8908 (cell), f.tortorici@conference-board.org