Economic recovery will not occur in a smooth, upward motion, economists say. In the third quarter, which ends today, economists expect GDP to have grown at a 3% rate, the fastest in two years -- this helps to explain why the stock market has risen sharply. Growth will be a slower 2.5% in the fourth quarter, economists predict, because the government's "Cash for Clunkers" program and the tax credits for first-time home buyers were important growth drivers. Growth could be as slow as 1.5% in the fourth quarter, some economists say, and the stock market could also slow if economic data turn out poorer than expected.
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