Monday, February 1, 2010

US GDP Grows 5.7 Percent in The Fourth Quarter of 2009

We had some good economic news with the US GDP growth rate estimated at 5.7 percent for the fourth quarter of 2009. The number sounds better then it is if you are looking at it for signs of a recovery. Still, it is good news.

"The U.S. 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."

"These are all preliminary numbers, of course. Commerce first estimated 2009Q3 GDP at a 3.5% annualized rate of growth. Later it had to revise that number downward twice, to the same 2.2% that remains in Q4 after eliminating inventory manipulation. In a month to six weeks, look for that number to slide downward again, although not as much as in Q3, which was an unusually high correction. It also looks like the inventory accounting will be a one-time deal, which won’t help the numbers in the next quarter."

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