Economy in U.S. Expanded at 5.9 Percent Pace in Fourth Quarter, Better Than Predicted

[jefferson_dem]

Economy in U.S. Expanded at 5.9 Percent Pace in Fourth Quarter
By Timothy R. Homan

Feb. 26 (Bloomberg) -- The economy in the U.S. expanded at a 5.9 percent annual rate in the fourth quarter, more than the government reported last month, reflecting stronger business investment and a greater contribution from inventories.

The rise in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance in more than six years, the Commerce Department said today in Washington. Inventories added 3.88 percentage points to GDP, more than previously reported, and investment in software and equipment grew at the fastest pace in almost a decade.

Manufacturers such as Deere & Co. may continue to lead the recovery as increasing sales prompt companies to boost purchases and add to stockpiles. At the same time, consumer spending, which accounts for 70 percent of the economy, is likely to be restrained by an unemployment rate that’s forecast to average 9.8 percent this year.

“Business equipment investment will continue to make a significant contribution to growth in 2010,” Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “Consumer spending is not expected to energize the recovery in 2010, but rather plod along at relatively subdued rates.”

The economy was forecast to grow at a 5.7 percent annual pace, the same rate the government initially reported in January, according to the median estimate of 76 economists in a Bloomberg News survey. Estimates ranged from gains of 4.2 percent to 6.3 percent.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aCNj5A7dd5hY&pos=2

[Teaser]

1. BOO!!! HISS!!!

.

[FreakinDJ]

5. Now where is the "Doom and Gloom" in that piece

Didn't this guy get the memo

[fasttense]

2. So we have officially recovered from the 2nd RepubliCON Great Depression.

So why is unemployment so high? Why are personal bankruptcies so high? Why are foreclosures at record levels?

Why do the malls look like ghost towns? Why are abandon buildings everywhere? Why are neighborhoods disappearing?

Why are the homeless increasing? Why is food stamps and food bank use escalating?

Why are states still laying off teachers, fire-fighters and police? Why are states struggling to meet budget demands?

Something very strange is going on here.

[WCGreen]

3. You ask to many questions....

Pay no attention to the man behind the curtain...

[jefferson_dem]

4. One bit of excellent news doesn't mean everything in the world is fixed ... yet.

Obviously.

[Yavin4]

7. You Need More Than One Quarter of Good Economic Growth To Fix Those Things

In baseball, one good inning does not mean that you're ahead of the game. It may take more than one good inning.

[proudohioan]

11. Good analogy!

[dmallind]

8. Let's see

Unemployemnt lags production. GDP is a measure of production. Employers rely on overtime and temps until they are sure the volume will continue before they rehire. Wouldn't you?

Personal bankruptcies and foreclosures are of course tied largely to unemployment - and the decline in house prices too. GDP doesn't measure these things. Isn't supposed to.

Malls look like ghost towns? Depends where you are. I have a terrible time finding a parking spot whenever I am forced to go to the one near me, and trust me upstate NY is hardly a boom towm. Retail sales data is stabilized and actually increasing nationally BTW.

Homeless increasing? Heven't seen data on that but assuming it's so that would also be tied to foreclosures and unemployment not GDP.

Why are states tsruggling to make budgets? Because tax revenues are down because so is employment. Again - not GDP related.

No it's not strange. GDP is designed to measure the value of output. It is only a leading indicator for unemployment, not a measure of it. Even if GDP went to 25% right now, bankruptcies and foreclosures and homelessness would still remain high for quite some time as people have incurred more debt and burned through savings while wiating for production to increase and jobs to return. GDP going up and things still being abd is not only possible, but highly predictable and usual. When we have had decent GDP growth for a couple of quarters then employment and all associated ills you mention will START improving.

Honestly what's strange is that people think any good economic news can only be true if U3 is below 5% and we have a surplus. That's way in the future and we need lots and lots of good economic news before we get there. That doesn't make good economic news wrong, or manipulated, or meaningless right now.

[Kdillard]

9. + 1000

[mkultra]

10. This is right wing rhetoric

unemployment is still high and the rest of things you mentioned are based on that ONE item. SO really, your question should be "why is unemployment still high"

[Clio the Leo]

6. ......

:headbang:

[peggygirl]

12. You don't hear too much about this. We hear more about the Social Secretary.

the media is owned by the RW...what do we expect?

[hulka38]

13. What happens when you take out the banks' profits from extortion and gambling winnings?