Economy soars 5.7 percent in Q4, fastest in 6 years reuters o Buzz up 0

[dtotire]

Source: reuters

Economy soars 5.7 percent in Q4, fastest in 6 years
reuters



On Friday January 29, 2010, 8:39 am

WASHINGTON (Reuters) - The economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest pace in more than six years, as businesses reduced inventories less aggressively, the Commerce Department said on Friday.

The first estimate put fourth-quarter gross domestic product growth at its fastest pace since the third quarter of 2003. The economy expanded at a 2.2 percent annual rate in the third quarter.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 4.6 percent rate in October-December period.



more:
http://finance.yahoo.com/news/Economy-soars-57-percent-in-rb-3553551014.html?x=0&.v=5

Growth was boosted a sharp slowdown in the pace of inventory liquidation, a factor that could mask the strength of the economic recovery from the longest and deepest downturn since the Great Depression.

But even stripping out inventories, the economy expanded at an annual rate of 2.2 percent, accelerating from the 1.5 percent increase in the third quarter, reflecting relatively strong performance from other segments of the economy.

Read more: http://finance.yahoo.com/news/Economy-soars-57-percent-in-rb-3553551014.html?x=0&.v=5

[livetohike]

1. Very good news!

Now we need to keep that momentum going, get some companies to start hiring again, and :thumbsdown: to all those people who don't think the President's economic team know what they are doing.

[FreakinDJ]

3. Need to change Corporate Tax code to encourage growth

First eliminate the tax incentives for corporations who are outsourcing jobs

[nyy1998]

12. Agreed

People here also need to realize that if we want to keep reasonably strong majorities in Congress after the midterm we need the economy to go up(and unemployment to go down). This is excellent news!!!

[Javaman]

2. Okay, this is good news...

hopefully jobs will soon follow.

[SpiralHawk]

4. "Noooooooo." - Republicon Party of No Nothing

"We want America to FAIL." - Rush DraftDodger Limbaugh (R - Leader)

[earthside]

5. Absolutely Hilarious!

Does anybody in the real world believe this?

When did unemployment drop to five percent? When did health care premiums get cut in half? Did you miss that twenty percent raise? How many new cars have you bought? Boats? Did the value of your house go up ten percent?

It's amazing what the pencil pushers can do within the parameters of "seasonally adjusted."

As Mark Twain said, "There are three kinds of lies: Lies, damn lies and statistics."

[unabelladonna]

6. i'm afraid i have to agree with you

until companies begin to rehire, there is no recovery.

[Robbien]

7. Banksters and vulture funds made out like bandits this quarter

Of course GDP will reflect that.

Haiti's GDP was going great before the earthquake and still 80% of the population was eating dirt cookies.

GDP is a lousy measure of how well a country's overall economic health is doing if one counts anyone other than just the rich.

[cheapdate]

9. Many people believe the measure of GDP is important...

and they are wrong IMHO, but many people believe it nonetheless. Blind pursuit of "growth" as measured by the GDP is a bedrock faith of mainstream economists. I believe this belief is dangerous and destructive. With that said, it's not a lie. It is what it is; it's the GDP. And the sad fact in America is that the many American sheeple will vote in 2010 based on their perception of the strength of the American economy. This is good news for Democrats if the number holds through November. I'm not saying it's great news for families getting kicked out of their homes or kicked off their health insurance, but from a purely electoral politics point of biew, it's good news.

[Roland99]

8. "sharp slowdown in the pace of inventory liquidation, a factor that could mask the strength"

Ya think????

[Zynx]

57. By the same standard, inventory liquidations made the recession look deeper as far as GDP goes.

You can't take one without the other. Use consistent measurements.

[cufford]

10. Yippee!

We're all saved!

Well, of course not really. Every day we get these kinds of "good news" reports, while along side them are five others that contradict it. Not to mention that these little stats are nearly always revised a month later, and downward. They are, in fact, insignificant over the long term.

Did nobody notice all those stories in just the past few days of more HUGE layoffs from Verizon, Tyson, WalMart and other corporate giants continuing to outsource their labor to other countries?

You can't look at little, isolated, daily, weekly or even quarterly occurrences, like in the stock market, and make any rational prediction about the general direction our economy is going. The larger picture is oh so much larger, and long term.

The fact is, things are continuing to get worse, and there's no stopping it, and that's because our economic collapse is due to 30+ years of declining wages for the masses in this country, and that's not changing. To the contrary, things are getting worse, exponentially faster. The more people who loose their good paying jobs, the more people who will loose theirs as well. It's a self-perpetuating domino effect that can't be stopped without rising wages. And that, of course, isn't in the cards.

Like with rising seas from global warming, there will always be daily ebbs and flows of the tide, but the long term direction is BAD! If one wants to look only at the low tides, and say "Look the sea level is lower, there is no global warming!", they clearly have their blinders on and are ignoring the reality right before us all.

[boppers]

13. Big vs. Little companies confuse the numbers further.

If Wal-Mart lays off 1,400 employees, it makes headlines, newspapers predict immanent doom and gloom.

If 2,800 smaller companies hire one employee each, no newspaper reports it.

One thing I do agree with is that "good paying jobs", at least those found in the mid-20th-century US, have been reduced or removed by greater industrialization, automation, market segmentation, and globalization. Huge corporations, which used to be a source of lifelong employment, are being smashed by smaller foreign and domestic competition, with both the good, and bad, that comes with it.

[taught_me_patience]

11. Does anybody believe this shit anymore?

If the GDP really was 5.7%, then why are 10yr treasuries trading UP today, with a yield of 3.6%. This is fucking farcical.

[mbperrin]

14. But even stripping out inventories, the economy expanded at an annual rate of 2.2 percent

A little truthier.

Compare these two:
Go home and sell your house for $10,000. Yippeee!, you say to the neighbors. I made $10,000 this month!

Next month, be sure to buy another place to live. Don't mention much to the neighbors, though, who thought you were doing so well....

[Loge23]

15. Wow! Soared so high I missed it! (eom)

[Swede]

16. Economy soars 5.7 percent, fastest in 6 years

Source: Yahoo

The economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest in more than six years, as businesses made less-aggressive cuts to inventories and stepped up spending.

The robust performance closed out a year in which the economy contracted 2.4 percent, the biggest decline since 1946.

After falling off a cliff at the start of the year, gross domestic product turned higher in the third quarter, and the quickening fourth-quarter pace reported by the Commerce Department on Friday suggested a sustainable recovery was building.


Read more: http://finance.yahoo.com/news/Economy-soars-57-percent-rb-3553551014.html?x=0

[donco6]

17. That's some good news.

Finally!

[Zoeisright]

18. I wish that would translate into jobs and better pay.

When is that going to happen?

[DJ13]

22. The Wall Streeters havent tripled their bank accounts yet

Give it a decade or two and we might get some crumbs.

[treestar]

26. To the self employed, things are picking up

The self employed never counted as unemployed, but saw business slack off. Nobody paid attention to that area of lack.

If small businesses are picking up, they can think of hiring.

[Name removed]

19. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Mithreal]

27. Is this your latest whacked out conspiracy theory?

[TheWraith]

29. Do you deny people here are trying to spin that this isn't good news?

There's a loud and vocal contingent of DU that wants Obama to fail just as badly as Limbaugh does.

[Mithreal]

32. Then you display your inability or reluctance to consider alternative explanations.

Maybe it is simply a lack of imagination. Do please tell me about this contingency that wants to see the President fail. I would like to know more.

[Iowa]

40. That's nonsense.

You're right about one thing. There is a great deal of anger on DU, and much of that is directed toward Obama. But the anger/criticism I'm seeing is solidly rooted in traditional Democratic progressive principles... in other words, it's for all the right reasons.

To suggest that anyone who criticizes the president (probably the majority of DU) are a bunch of Limbaugh wackos suggests that you aren't really driven by the same traditional Democratic principles that drive them. If you were, at the very least you would be able to distinguish between the motivations of pissed-off-progressives and Limbaugh himself.

[Mithreal]

41. +1

[TheWraith]

44. Thank you for that giant strawman argument.

If it had fuck-all to do with what I said, then, well, you might have a point.

I repeat: There is a loud contingent on DU that bashes everything Obama does, and wants to see him fail at everything so they can gloat and say that only doing it their way will really work. Their motivations or what they think is the "right way" is irrelevant. They're motivated by the egotistical desire to believe they and only they are the wise ones.

[Mithreal]

47. I was wrong, you do have an imagination.

Who is this contingent?

Take a deep breath and give me your attention for just a moment.

If I know who you are talking about, that "contingent" really wants President Obama to be great and believe enormous pressure will be required for him to even notice we are suffering worse than the Big Banks, Wall Street and Military Contractors and much less than the people our Empire is rolling over. Those same folks are not willing to remain quiet and are using their voices in one of the ways they know it will get noticed. They usually try to explain they stand on principles and are ignored by Dem Leadership. They are the ones who say Dems must embrace populism. They are good people.

Please respond.

[Iowa]

64. Again, that's nonsense...

Except for an occasional Freeper who slips through the net, every single criticism of Obama I have seen on DU has been rooted in traditional Democratic/progressive principles; it is almost always very obvious that is the case. It appears that you have invested a great deal of emotional capital in Obama - the man - so much so that your perceptions about the motivations of others is skewed. You don't seem to grasp the notion that, for many, principles supersede personalities. And your utter contempt for your fellow DUers (i.e. "They're motivated by the egotistical desire to believe they and only they are the wise ones") reflects both an arrogance and a stunning superficiality that isn't likely to garner much respect for what you have to say.

Furthermore, you are now making a new claim... that the motivation of this supposed "contingent" on DU is completely irrelevant. Yet in the very next sentence you go on to describe your perceptions about their motivations in an effort to bolster your position. In other words, you express outrage about the motivations of your fellow DUers while simultaneously claiming that their motivations have no relevance to this discussion. Yet you are the one who brought it up in the first place! It makes absolutely no sense.

[justanaverageguy]

20. Hold on

If I only have $10 to my name, a 5.7% increase doesn't mean very much. Right now we have a $10 economy. It's kind of like coming in 2nd place in the boxing match.

With that being said, it is still positive.

[brentspeak]

21. The article is propaganda: the 5.7% number is an accounting trick based on an inventory bounce

Nothing more.

http://krugman.blogs.nytimes.com/2010/01/29/the-blip-cometh/

[bc3000]

23. Thanks for that link. I trust Krugman more than I do most.

[FBaggins]

30. It's not really an "accounting trick"

It represents real "stuff" being produced (and produced here). A big part of the decline over the last several quarters has been from a decrease in that number... surely you don't consider that artificial (or a "trick") do you?

Even without the inventory build, it was a substantially positive number (almost at the 3% rate you would like to see over long periods).

There was plenty of good news in the report. One that I haven't seen mentioned is the positive contribution of residential investment. It was the second positive quarter in a row (and only the second positive quarter in the last three years plus. In fact, fixed investment overall showed the first positive contribution since the 2007 Q2 (and only the second in three years).

Exports were up strongly for the second straight quarter after a year and a half of negative numbers (and both quarters are significantly higher than anything in the last three years).

None of it is "juiced" by federal spending (second time in ten quarters).


On edit - Oh... and defense spending as a negative contributor for only the second time in a couple years.

[westerebus]

33. Residential investment dropped to 5.7% in QT 4.

From 18.9% in QT 3. The here's $8,ooo go buy a house program ended. Go figure?

The worrisome part is Personal Spending went from 2.8% in QT 3 to 2.0% in QT 4. The consumer/voter spent less on Xmas because they are worried where the next pay check is going to come from.

The economy still sucks.

[FBaggins]

36. Sure it did... but a positive number still beats a negative one.

The worrisome part is Personal Spending went from 2.8% in QT 3 to 2.0% in QT 4

That's not worrisome. It's likely to go down even farther. The first quarter or two out of a recession often shows big GDP gains (for just these kinds of reasons)... it's the next 2-3 quarters that will tell the tale.

Some of that personal spending is pent up demand from prior quarters as people make some purchased that they had been putting off. That can't continue for long (especially while unemployment is still high). We'll see what the ongoing "run rate" is for spending (again over a few months).

The economy still sucks.

Well... yeah (and "duh!")... but it sucks less than it did. Which beats (getting worse every day) hands down.

[westerebus]

42. Would you favor a second stimulus package?

[FBaggins]

58. How much do I get?

:)

Seriously, I guess it would depend on the proposal. The last one wasn't quite as "stimulating" as I might have prefered.

OTOH, have the middle class cuts that were accelerated by adjusting payroll deduction ended? If so I think I would favor extending them. Now isn't a great time to cut take home pay (especially when rising HC costs and tiny raises combine to cut those checks anyway).

[westerebus]

63. Given the SOTU.

I would estimate not very much. Unless you happen to be either a corporation or an employer adding jobs or investing in something green.

For what its worth, when I see the numbers creeping downward, I'm reminded of an Irish proverb: Who cares if you died of a heart attack, when you got hit in the arse by a train.

:)

[Lucky Luciano]

37. The personal spending decrease is attributed to the end of cash for clunkers. nt

[westerebus]

46. Thanks. So we are back to buying groceries.

[Tunkamerica]

39. the 'here's $8,ooo go buy a house program' was exteneded

it's still in effect for a few more months.

[westerebus]

43. Thanks.

I thought they had pulled it.

[Zynx]

56. That's not an accounting trick.

The logic of including inventories is the following:

GDP is a measure of consumption for the most part only because measuring production is difficult. The logic is that for a final good to be consumed, it must have been produced. Hence, we use consumption as a production proxy.

The reason inventories are included is that changes in inventories reflect production that was not yet consumed. Thus, by measuring changes in inventories we are measuring changes in production not reflected in consumption numbers.

That being said, always look at final sales and every other component as well. They show a moderate recovery. There is no doubt at all that the economy is growing. The rate at which it is growing is up for debate.

[TomCADem]

68. Sadly, Many Folks Don't Believe Krugman's Analysis On Health Care Reform

Some folks happily cite Krugman to attack President Obama, but then attack him as a DLC Democrat when Krugman supports the health care reform bill.

[Stuckinthebush]

24. See! The Bush tax cuts are finally working

All you liberals keep whining about tax cuts for the rich hurting the economy. Well, HA! You see now that they are working. It just takes TIME.

:)

[Hissyspit]

25. You joke. Some rethug will make the argument on TV today, just wait and see.

[Stuckinthebush]

28. Lord, don't I know it Hissyspit

We should start a pool at $5 a bet for the exact hour and day that a republican invokes tax cuts as the reason for the turn around.

[FBaggins]

59. Just the way the game is played - but that's minor league.

The pros blame/credit either Clinton or Reagan

[ShortnFiery]

31. Where are the jobs? Oh, wealth being transferred up up up!

:(

[UglyWarrior]

60. Hopefully the job report to be released soon will show improvement

I'm confident, but cautious, that things will get better in the jobs department soon.

[Alias Dictus Tyrant]

34. This is not as good as it appears

GDP is only a proxy for the economy and government fiscal policy and should not be confused with "the economy". It is akin to conflating the stock market with the economy. The economy can shrink while the GDP grows under a number of circumstances. That appears to be the case here.

When GDP and economy are out of sync, it usually is a bad sign because it means there is a piper that needs to be paid in the near future.

[Alias Dictus Tyrant]

35. However, I will add that conditions are improving generally n/t

[Mithreal]

38. Your original statement seemed strong, probably didn't need the disclaimer.

:thumbsup:

[bemildred]

45. Thank God! Obama has already turned the economy around! nt

[Mithreal]

48. Right. As a peon, mostly all I got was trickle down. Hand me a towel, please.

The fundamentals of the economy are strong.

Naysayers are a bunch of whiners.

Calling this other than a turn around is all in their heads.

Real economies are for losers.

Happy day are here again!

Yeehaw, the Great Recession is over!



Check and mate.



It's the jobs, stupid. Not calling you stupid, it's just a phrase.

[bemildred]

50. Aw shucks, you do sarcasm too.

:hi:

[Mithreal]

51. Ha, alright. Sometimes I don't catch the sarcasm.

:hi:

[bemildred]

53. You never can be sure without the smiley. nt

[tabasco]

49. That's horrible news!

The Obama haters will be outraged!

[Mithreal]

52. "Obama haters" is overused inappropriately. Please stop.

If you mean Republicans then say so.

Thank you.

[tabasco]

54. Hahahahahahahaha.

No.

[Mithreal]

55. If you see "hater" speech, then alert.

You are responsible for your childish behavior.

I can't help but think you do the community a disservice.

"Obama hater" is about as welcome as "cheerleader". If that is the sort of rhetoric you want to encourage then go right ahead, but expect others to ask why you feel it necessary.

[tabasco]

62. Childish is expecting overnight utopia.

We have a good leader trying to turn this country around and a bunch of assholes expecting him to do it overnight.

Same asswipes that gave us Nixon and Reagan.

[Mithreal]

65. Break the circle

[cstanleytech]

61. I'm just waiting for the far right now to come in and try to claim the glory of it for themselves

and Bush while of course trying to shrug of any responsibility for causing the problems in the first place or for anything else that went wrong under their rule like 9/11 to name just one.

[deacon]

66. To get ANY good economic news like this is amazing given what Obama inherited. The Dems

stopped the free fall.

[deacon]

67. And here's more that needs to be trumpeted

A very productive Congress, despite what the approval ratings say

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/29/AR2010012902516.html

[tonysam]

69. And job creation is still in the shitter with more joblessness

and no end in sight.

The happy talk from our government is getting old.