WASHINGTON (MNI) – The following is the text of a statement by
senior White House economic adviser Alan Krueger on the advance estimate
of Q2 GDP released Friday:

Today’s report shows that the economy posted its twelfth straight
quarter of positive growth, as real GDP (the total amount of goods and
services produced in the country) grew at a 1.5 percent annual rate in
the second quarter of this year, according to the “advance” estimate
released by the Bureau of Economic Analysis. Over the last three years,
the economy has expanded by 6.7 percent overall, and the private
components of GDP have grown by 9.9 percent. While the economy
continues to move in the right direction, additional growth is needed to
replace the jobs lost in the deep recession that began at the end of
2007.

With today’s report, the BEA also released its annual revisions
back to 2009. While the revisions did not meaningfully change the pace
of growth over that entire period, it is noteworthy that State and local
government purchases were revised up in 2009, which is consistent with
the Recovery Act cushioning the effect of the recession and helping to
launch the recovery. Since the Recovery Act funds have been phasing
out, however, declining State and local government activity has
subtracted from GDP. Indeed, today’s report indicates that State and
local government purchases have declined for 11 straight quarters, the
longest streak ever recorded since the official record of quarterly data
began in 1947.

To strengthen economic growth and increase job creation, President
Obama has proposed to Congress a plan that would help State and local
governments retain and hire teachers and first responders, assist the
construction sector and economy of tomorrow by rebuilding and
modernizing our Nation’s infrastructure, and would give small businesses
tax cuts to encourage them to increase payroll. President Obama also
proposed extending tax cuts to protect middle class families and
virtually every small business owner from getting a tax increase at the
beginning of next year. The Senate passed the President’s plan this
week and President Obama has said that as soon as the House will act he
will sign it right away in order to give certainty and security to
middle class families. Extending these tax cuts would provide more
certainty for the economy for 98% of American families and 97% of small
business owners.

** MNI Washington Bureau: 202-371-2121 **

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