Today the US Commerce Department released solid figures for the third quarter. They reported that the US Economy only grew by 2.8% last quarter (July-Sept). Originally it was thought to have grown 2.8%. While the economy is showing signs of recovery, it is a slow, struggling battle. On the positive side, after four quarters in a row of showing recession levels comparing to the 1930’s, this news is not all bad news.

A great chunk of the economic growth can be attributed to

the rise in home and car sales. Government stimulus programs are most likely responsible for this upturn. Cash for Clunkers and Home Buyer Tax Credits for first time home buyers were definitely taken advantage of. While the Cash for Clunker program has ended, the Homebuyer Tax Credit has been extended and now includes a credit for all home buyers’ not just first time buyers. Analysts however are predicting a drop in home sales over the winter months.

The major concern is still unemployment. The unemployment rate is still over 10% and does not show any signs of decreasing. In fact, many analysts predict the unemployment rate will rise to above 11% sometime next year. Even with numbers showing economic growth, experts say the rate is not high enough yet to convince companies to hire.

With the economy’s upward turn, US consumer confidence is slightly on the rise. Many people are being cautiously optimistic. Still, many consumers say they will not spend more this holiday season. Economists however are hopeful that the rise will continue into the 4th quarter at a rate between 2.5% and 3%.

Perhaps the biggest worry for our economy is the possibility of a double dip recession. Analysts fear that if numbers come in lower than expected in the fourth quarter it could send our economy back into a downward tailspin.

Even without a double dip recession, analysts caution that they expect growth to slow considerably next year. In early 2010 most of the government stimulus money will be used up and it is uncertain whether or not consumers will continue to spend without government incentives. Add to the equation that consumers generally curb their spending after the holidays, numbers could definitely shift downward. Only time will tell whether or not we are truly digging out of the trenches, or if we are just experiencing a small reprieve from the current economic crisis.