Washington » The White House points to a positive flicker of economic growth in the past three months as a sign the stimulus package is working and the downturn is ebbing.

The Commerce Department reported Thursday that the nation's gross domestic product grew at a clip of 3.5 percent in the third quarter, the highest increase in more than two years since the nation entered a recession.

"The fingerprints of the economic activity generated by the Recovery Act are plain to see in this GDP report," Jared Bernstein, chief economist and adviser to Vice President Joe Biden, told The Salt Lake Tribune . "And that's very important because a major point of the act was to help build a bridge over the hole caused by the deepest recession since the Great Depression."

While Wall Street stocks jumped on the news, closer to home it appeared premature for any celebration.

Salt Lake City and the Provo-Orem area ranked in the top three metropolitan areas for foreclosure rates. The state still is down more than 50,000 jobs over last year and unemployment hovers above 6 percent.

"It does not suggest that our problems with housing and commercial real estate and rising unemployment and job losses nationwide are behind us," says Jeff Thredgold, economist for Salt Lake City-based Zions Bank. "But [the GDP growth] is obviously a step in the right direction."

Thredgold said the stimulus package's effect has been not so much in creating jobs but saving positions for teachers, firefighters and other public-sector jobs. And he warned that Utah unemployment may still rise.

Bernstein said in an interview that the $787 billion stimulus effort has saved or created a million jobs nationwide and his office, as well as outside analysts, forecast another 2.5 million jobs could be coming by the end of next year.

"There is no way this act can fully offset the pain that this recession has caused American families, particularly on the job market side, but it is helping," Bernstein said.

The American Recovery and Reinvestment Act -- aimed at helping the economy through tax cuts, business loans, construction projects and stabilization funds -- is structured to ensure ongoing stimulus as the economy recovers, Bernstein said.

"Remember it's only about half of the Recovery Act that has been put to work in the economy so far," Bernstein said. "There's a lot more to come. And that time-release aspect is important because we could see this was going to be a protracted downturn."

Recipients of stimulus funds in Utah are currently reporting the numbers of jobs saved or created, with initial reports citing that number as 535, at the moment. That's in addition to the 4,164 jobs the state of Utah reported to the federal government as a result of stimulus funds.

Utah Republican Sen. Bob Bennett, a senior member of the banking and joint economic committees, says the White House is wrong to tout the stimulus as the big reason the GDP rebounded so strongly in the past quarter.

He called the increase an "artificially large bounce," and said it was unsustainable.

Bennett says studies he has seen indicate the stimulus impact only accounts for 10 percent of the economic growth, while a much greater percentage can be traced to how business leaders initially responded to the recession.

When the housing bubble burst, industries in the United States and abroad hunkered down, slowed production and tried to sell off excess inventory.

Over the months, Bennett said the companies worked through their stockpiles and were then spurred to increase production again.

As a result, Bennett said, the growth is artificially high and the White House is "making a mistake" by tying it to the economic stimulus.

"They are setting people up for serious disappointment," he warned.

tburr@sltrib.com

Tribune reporter Matt Canham contributed to this report.