The US economy showed signs of recovery in this year’s third quarter where 2.2 percent growth rate was met but failed to come across the 2.8 percent expectation. 

Despite the fact that the 2.2% recovery is seen as a blessing, there are still few factors being blamed for the slow rate of growth.  Factors such as people not spending much, companies’ inventory cutbacks, decline in company spending in terms of inventory and supplies, and a commercial sector’s weak construction activity. 

Even with the decelerated growth pace, it is still good to know that the economy is becoming more favorable after months of going downhill.  Ever since last year’s recession, there has been a nonstop economic decline until this year’s third quarter and many are hoping and predicting that the current quarter will have a higher rate of growth. 

Analysts say that there would most likely be a 4% growth in the economy at the end of 2009.  This will recall the more than 5% growth in the first quarter of 2006. 

Even though the economy is growing, the country’s economy still has more hurdles to overcome before it can be out of the woods.  At 10%, the rate of unemployment may continue to rise.  This may affect economic growth in the US to drastically slow down to just 2-3 percent.

The growth in this year’s last quarter is credited to different companies resupplying their inventories that was dramatically exhausted during and after the economic downturn.  As a result, factory production will go into overdrive and will be a contributing factor to economic growth.

An increase in business and consumer spending as well as rising export will also boost the economy in the long run. 

Much of the cause behind last year’s recession was the crisis in the housing sector, where mortgages kept piling up until financially distressed homeowners were no longer able to sustain them.  This resulted to homeowners not just losing their homes but a lot of people had to spend less on practically everything including buying a home. 

Car industries have also been knocked hard where major car manufacturers such as General Motors suffered enormous plummet in sales forcing them to downsize and ask for government bailout.  These further contributed to the decline in the country’s economy. 

Thanks to the $8,000 tax credit offered by the government to first-time home buyers, home-sales stayed buoyant and the cash for clunkers program helped lots of individuals obtain cash or new cars in exchange for their old cars and car dealers also benefited from it.  Even though the cash for clunkers program is no longer ongoing, the tax credit for homebuyers would still go on for the next year and is expected to play a role in the continued economic recovery.

There are still uncertainties whether the economy could continue its level of recovery for the next 2-3 years.  Economists say that the government needs to offer additional stimulus programs in order to encourage consumer spending, which is considered the means of support of the overall US economic activity.

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