Gene Sperling, a Kerry economic adviser, latched on to export growth that continues to lag behind imports and on to relatively low business investment. Non-residential building rose only 1.4 percent, despite surging corporate profits.
"In the last three months, the economic performance was disappointing for middle class families and below expectations: the results that have become the norm for the economy under President Bush," Sperling said.
_____In Today's Post_____
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Is It the Economy? The Washington Post's Jonathan Weisman writes that it has been a confounding election season for economy watchers.
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_____Live Discussion_____
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Transcript: Washington Post staff writer Jonathan Weisman discussed his story about why the economy may not be the best predictor of the outcome in this year's presidential election.
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Exports did rise 5.1 percent, but that was slower than the 7.3 percent increase in the second quarter. Imports during the third quarter rose 7.7 percent. That export lag shaved 0.9 percent from total economic growth, said Stephen Gallagher, an economist at SG Economic Research in New York.
The liberal Center for Budget and Policy Priorities noted that the share of the economy going to wages and salaries has slipped from 49.5 percent when Bush came to office to 45.4 percent in the third quarter of 2004, even as corporate profits have risen as a share of the gross domestic product over that time, from 7.8 percent to 10.1 percent. After adjusting for inflation, total wage and salary income is just about where it was nearly four years ago, said Isaac Shapiro and David Kamin, two economists with the center.
Wall Street economists were generally more upbeat about the quarterly numbers, even if they came in below the consensus 4.3-percent forecast.
"All in all, it's quite a positive number," said Mickey Levi, chief economist at Bank of America.
But Wall Street is expecting growth to slow in the final three months of the year, as rising oil and gasoline prices take a toll on business and consumer spending. Levi said the economy is showing solid strengths that should blunt that impact. Businesses slowed down the growth of their inventories in July, August and September, dampening growth in the third quarter, he noted. But that should give some room for growth even with rising oil prices, as companies work to restock their shelves.
Yamarone was far less sanguine. A cold winter, with soaring natural gas and home-heating fuel costs, could create a "tsunami" for personal spending, he said. Argus is forecasting growth of 2.9 percent for the fourth quarter, substantially below the 3.3-percent growth in the second quarter, which Federal Reserve Chairman Alan Greenspan dubbed a soft patch.
But Yamarone said he would likely revise his forecast downward.
