Auto Industry Boosts Economic Growth In First Quarter, More Evidence That Saving It Was The Right Choice
"Auto Industry Boosts Economic Growth In First Quarter, More Evidence That Saving It Was The Right Choice"
The American economy grew more slowly than expected in the first quarter of 2012, expanding at a rate of 2.2 percent. While the numbers are another illustration that the economic recovery is still on the right track (particularly compared to European countries that have fallen back into recession), they fell short of estimates.
One bright spot of the Commerce Department’s Bureau of Economic Analysis report, however, is that the American auto industry is continuing its resurgence and adding to economic growth:
Motor vehicle output added 1.12 percentage points to the first-quarter change in real GDP after adding 0.47 percentage point to the fourth-quarter change.
That the auto industry helped boost economic growth is yet another sign that letting the industry fail — as many Republicans, including presumptive GOP presidential nominee Mitt Romney, wanted to do — would have had disastrous effects on the American economy.
The auto industry rescue, according to some estimates, saved more than one million jobs. Since it was saved, the industry is growing again — its biggest companies are adding jobs, boosting sales, and posting record profits. As today’s report shows, that’s having a sizable impact on America’s economic growth, and it’s translating into job growth as well: in March, nearly 10 percent of the 120,000 jobs added to the economy came from growth in the auto and parts manufacturing sector.