The Commerce Department's revised GDP report Thursday threw cold water on the fading hope that the economy is breaking out of its doldrums.
The gross domestic product (GDP) -- the broadest and most watched measurement of America's economic health -- grew at a weak 1.8 percent in the third quarter. That's down from the previous estimate of 2 percent and far from the three to five percent growth of previous recoveries that is needed to reduce an unacceptable unemployment rate in the New Year.
Unemployment declined last month from 9 percent to 8.6 percent, but that was largely due to the thousands of discouraged workers who stopped looking for jobs and thus were no longer counted in the workforce.
With unemployment benefit claims falling somewhat, corporate profits climbing and some modest increases in manufacturing activity, several prognosticators believed the lackluster Obama economy was finally turning around.
But many economists have since trimmed their year end predictions for 2012, forecasting weak growth next year in the 1.5 percent to 2 percent range.
"Unfortunately, I think we're going to see a slowdown over the course of next year," business economist Ethan Harris of Bank of America Merrill Lynch told reporters last week.
"Not only do we have the European crisis spilling over and hurting U.S. trade and confidence," Harris said, but the U.S. economy is facing "homegrown shocks."
Our economy certainly faces possible upheavals from Europe's severe debt crisis which shows little or no signs of near term improvement, but also from a $15 trillion debt here at home and a line of budget deficits that is expected to climb by another $1 trillion in this fiscal year.
Not only are local and state governments continuing to cut their payrolls to combat continuing budget deficits, but Congress isn't making much headway in its own struggle to curb out of control spending and future debt.
President Obama's latest job recovery plan has been rejected on Capitol Hill and the White House is running on empty on any future economic growth proposals. Instead, Obama has been running around the country bashing the Republicans for opposing his proposed tax increases on investors, corporations and small businesses, and playing the class warfare card against wealthy Americans who he says aren't "paying their fair share."
For the record, the richest 20 percent pay most of the nation's federal income taxes.