Friday, January 29, 2010

Huge news: GDP growth of 5.7% in 4th quarter of 2010

Huge news today, as the 4th quarter GDP jumped 5.7%, the highest growth in 6th years.  Here are the bullets:

  • The strength of the recovery was greater than anticipated - one survey noted in the article indicated that economists only expected a 4.7% recovery.
  • On the whole, the economy of 2009 shrank 2.4%.  This is the first yearly decline since 1991.
  • 3.4% of the growth in 2009 came with an increase in business inventories, which were slashed in 2008 and the first half of 2009 as consumer demand dropped.
  • Consumer spending, which is 2/3 of the GDP, only grew by 2% in the 4th quarter, relatively sluggish growth.
  • The growth, though clearly good news, will not continue at this rate in the future.
  • The unemployment rate is still around 10%, and most do not expect it to significantly drop for some time.
There are many who will (rightfully) say that they are not noticing the effects of the recovery, and it is clear that will still have a long way to go - nonetheless, this report is definitely good news.

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