US Says Economy Grew 3.5 Percent in Third Quarter
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This is the VOA Special English ECONOMICS REPORT.
Early estimates show that the United States economy began to grow again in July, August and September. The three-and-a-half percent growth was the first expansion in more than a year, and the strongest in two years.
The government said increases in consumer spending and exports and improvements in business investment led the growth. So did increased federal spending and housing investments.
But high unemployment could limit growth for some time.
President Obama had this reaction to Thursday's report on the gross domestic product -- a wide measure of goods and services in the economy.
BARACK OBAMA: "This is obviously welcome news and an affirmation that this recession is abating and the steps we've taken have made a difference. But I also know that we've got a long way to go to fully restore our economy and recover from what's been the longest and deepest downturn since the Great Depression."
That downturn was partly caused by bankers and others taking irresponsible risks to earn huge payments. So say their critics. Criticism of Wall Street pay is nothing new. But never before has the government used hundreds of billions of dollars to rescue companies that made risky investments.
In June, the Obama administration appointed lawyer Kenneth Feinberg as the "special master" on executive pay -- also known as the pay czar. Congress gave him power over compensation of the twenty-five highest-paid employees at seven companies most indebted to taxpayers.
This week, he gave lawmakers a progress report.
KENNETH FEINBERG: "We greatly reduced the amount of cash that would be made available to these senior officials. We reduced that cash by approximately ninety percent."
The seven companies are in the financial and auto industries. Now Kenneth Feinberg must consider their next seventy-five highest paid officials.
But some management experts warn that limiting pay could make it harder for taxpayers to get their money back. Edward Lawler at the University of Southern California says these companies may now have difficulty getting and keeping high-quality employees.
But he agrees that in recent years, many companies have tied pay to short-term performance, instead of their long-term health. He also says boards of directors need to do more to control pay.
EDWARD LAWLER: "We could have boards that do a much better job of designing compensation plans. If we had good boards, I think they could certainly do a better job of that than the government can."
Last week, the Federal Reserve proposed to examine pay policies at thousands of banks. The central bank would reject policies that it thought might cause bankers to take too much risk.
And that's the VOA Special English ECONOMICS REPORT. I'm Mario Ritter.