On 29 October 2009, the U.S. Commerce Department's Bureau of Economic Analysis announced that the U.S. economy grew at a seasonally adjusted annual rate of 3.5% over 2Q09. 
Since 2002, the U.S. economy has grown at an annual average rate of 2.3%. The 29 October 2009 government report that the U.S. economy had grown at an annual rate of 3.5% should set off alarm bells above the heads of CIOs currently finalizing their 2010 budgets. The economy did indeed grow, but CIOs and IT executives should consider the reasons for the vigor with which it grew during 3Q09 before using this positive news to justify any requests for increases to their 2010 IT budgets. The three major components of the U.S. economy reported positive growth in 3Q09 (see Table 1); however, because personal consumption expenditures constitute more than 70% of the entire economy, a closer examination of the actual personal consumption data quickly reveals the genesis of a great deal of the actual growth during 3Q09.
Table 1. 3Q09 Results by Gross Domestic Product (GDP) Component
Personal Consumption Expenditures |
+ 3.4% |
70% |
Gross Private Domestic Investment |
+ 11.5% |
11% |
Government Spending |
+2.3% |
19% |
Source: U.S. Bureau of Economic Analysis (October 2009)
Prominent in the personal consumption expenditure report tables was a whopping 56% increase in the category "motor vehicles and parts," indicating the very favorable results of a temporary government stimulus plan to encourage new car sales. Yet another temporary U.S. government stimulus plan directed toward helping first-time home buyers caused a boost in gross private domestic investment results. Although the U.S. government's automotive and housing economic stimulus programs have favorably affected the United States' 3Q09 economy, many businesses have still not experienced an increase in organic sales that would lead to a sustainable business expansion; therefore, government stimulus programs have only given the economy a temporary boost.
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