GDP Grows 5.7% in 4th Quarter But '09 Still Saw Biggest Decline Since WWII
Posted by Jim Hoft on Friday, January 29, 2010, 5:49 AM
The economy grew at 5.7% in the 4th quarter of 2009 the largest quarterly gain since the Bush years. Still the US saw the greatest economic decline in 2009 under President Obama since 1946, the first year after the end of World War II.
Reuters reported:
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 Commerce Department said on Friday its 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.
“Wow, great number. It’s very solid and gives us a running start into the second half of the year when we can’t rely on government stimulus,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago…
…For the whole of 2009, the economy contracted 2.4 percent, the biggest decline since 1946, the first year after the end of World War II.
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Published May 24, 2012 at 8:46 pm - 51 Comments
Neoavatara commented:
Yeah, that is all well and good. You spend a trillion dollars, you expect a bump. The question is, will businesses start hiring? Otherwise, it is simply money in the pocket of fat cats.
http://neoavatara.com/blog/?p=9680
Beto commented:
There will be another headline in a few days stating the GDP unexpectedly fell and the previous estimate was miss figured.
Tom commented:
This is perilous territory for Republicans. We have to not talk down the economy, yet show why these gains aren’t good for the economy in the long run. It is good news to have positive numbers at any time because certain areas can catch on, but it will turn us in to an Isolationist society again. You want the economy to do well, but not Obama…that is often a tough sell.
the number is good for socialists everywhere.
Tammy commented:
Of COURSE it grew in the last quarter. It’s Christmas, for cripes sake! Watch the next quarter plummet. Puleeese.
pjean commented:
Don’t most people expect this kind of performance during the holiday season? Am I wrong?
bill-tb commented:
Now the lies start … Government economists pretending that the economy grew. Who didn’t know in an election year this was coming? Watch — Stimulus spending through the roof this year.
Government spending is not economic growth.
Consumer spending was down in December. Wages in the private sector was up 1.9% in 2009, inflation was up 2.5%, what growth?
So tell me what fundamental economic indicator has changed? The BLS said in October that they would have to revise the unemployed number upwards 1.2% because of errors in 2009. The update date is February 4 2010, said the BLS
john commented:
To be fair all but 2.2% of the growth is based on the need to replenish inventory.
Does anyone have the actual consumer spending numbers? Given Christmas one could expect them to be slightly higher than usual.
Tom63010 commented:
Let’s illustrate this can we?
This is the equivalent of a worker who had his pay reduced by 50% last year being exited about a 10% raise this year.
bill-tb commented:
It wasn’t widely reported so you need to peruse the financial sites for December spending … Down slightly — I wonder why it wasn’t widely reported? Could that be the reason it wasn’t?
The Deloitte Consumer Spending Index dipped slightly in December 2009, primarily due to a decline in real wages, but it remains near its highest level since 2004. The Index attempts to track consumer cash flow as an indicator of future consumer spending.
And the reason is wage contraction … with inflation creeping up. Seen the gasoline price lately?
source: http://rismedia.com/2010-01-16/deloitte-consumer-spending-index-ticks-downward-in-december-2009/
Militant Conservative commented:
Keep your money in cash in your pocket. When the correction comes youll be in a very good position. I will be debt free half way through this year if not sooner. When the next wave hits it is gonna get uglyer. Got you Obama pantry stocked for 6 months?
this will at least take the sting out of the Jimmy Carter inflation to come. powder is dry.
Brian commented:
It is no surprise that it ended up, with trillions of dollars being spent it only could go up, but we all know it’s smoke and mirrors.
It is like Rush said last month, it’s like your limit being extended on your credit card, and you spend the extra money, and count it as extra income. Yes you spent more money, but you have no way of paying it back. These false highs will only come back to hurt us. Notice the Fed has to keep interest rates low, the second they start to tick up we are in deep trouble.
wanumba commented:
Total crap. Apart from the Christmas blip, which qualified as a blip this year, not a surge, the stores have been and remain quiet. Doubtful many of even the big ones didn’t break even after the Christmas shopping fizzled. A whole section of our local Main Street small businesses are closing their doors when their leases end in 2 days.
This is “hockey stick” machinations. Hide the decline. The numbers are trending down down and they’ve manufactured a chart to show a sudden rise. Despicable liars.
The only ones getting income are Democrat poltical connected who are helping themselves to the American Pie. A new cleptocratic elite. Third World isn’t a happenstance, it’s a manufactured state of theft of the citizens.
Chisum commented:
Fourth-quarter GDP 5.7%
The administration got some unexpectedly good news on the economic front this morning, although it had to be qualified almost immediately. Annualized GDP in the fourth quarter rose 5.7%, the second quarter in a row of growth in the economy, which makes the recovery official. However, almost two-thirds of it came from a slowdown in liquidation of inventories, leaving an anemic 2.2% of actual growth
http://hotair.com/archives/2010/01/29/fourth-quarter-gdp-5-7/
wanumba commented:
Chisum
That’s proof closer to reality, but wouldn’t be the least surprised that it isn’t even 2.2%. NOTHING is going on out there. Can ANYONE attest to a new business opening anytime in the last 6 months anywhere? Or hiring for expansion of existing business?
The economy is CONTRACTING around here and more lay-offs are ahead as more factories (read “producers”) close.
“Working as planned.” Bust the system, crush it and THEN establish the new order.
seven commented:
So if it grows another 5% it will be back to the level during Bush. Most of this is exports due to the cratered dollar. It is cheap to buy from America.
Pat the First commented:
One needs to remember as well that corporations will look at their finances and if they need to spend some money on a need they decide often to do that in December depending on their fiscal year. I know farmers who do that all of the time because they usually don’t get their harvest money until toward the end of the year.
exceller commented:
It’s Bush’s fault.
Nahanni commented:
GDP: There’s Your Inventory Bounce
http://market-ticker.denninger.net/archives/1915-GDP-Theres-Your-Inventory-Bounce.html
The amusing part of the report is found in the personal income and outlays section:
Current-dollar personal income increased $119.2 billion (4.0 percent) in the fourth quarter, compared with an increase of $35.1 billion (1.2 percent) in the third.
Personal current taxes decreased $11.7 billion in the fourth quarter, in contrast to an increase of $3.5 billion in the third.
Got it? People aren’t earning the money, the government is handing it out. You don’t pay taxes on government handouts, for the most part. There was a potential “improvement” signal in the third quarter related to tax liabilities increasing, but that has now reversed – hard – which throws a big fat rock at the concept of employment turning in any meaningful way. Instead the “current dollar income” is being borrowed and given away by the government through unemployment extensions and other forms of handout.
Non-residential structures (commercial R/E) plummeted by 15.4% yet residential is claimed to have increased. Homebuyer tax-credit incentives? Probably.
Looking at the breakdown there are some warnings: Utility expense appears to be comparatively strong, which looks to be the lion’s share of the Q4 household service change, with the rest being almost all in health care costs. This is not a good trend when an increasing percentage of personal income is comprised of government handouts.
Non-durable purchases were up significantly at bars and restaurants (normal during the 4th Quarter – look at 06 and 07) while gas and energy purchases were down in Q3 and Q4 – a not-good change considering the trajectory of prices for both (demand is decreasing significantly, as prices have been up a LOT, so if gross sales are slightly down…..)
The revisions to this report should be interesting. Remember that the last quarterly GDP report was revised downward some forty percent over time. I’ve archived this copy privately on The Market Ticker so as to preserve any “accidents” in this regard.
Uh, Where’s My Recovery? (Durable Goods)
http://market-ticker.denninger.net/archives/1912-Uh,-Wheres-My-Recovery-Durable-Goods.html
Oh, the Census finally admitted to their revision?
New orders for manufactured durable goods in December increased $0.5 billion or 0.3 percent to $167.9 billion, the U.S. Census Bureau announced today. This increase followed two consecutive monthly decreases including a 0.4 percent November decrease. Excluding transportation, new orders increased 0.9 percent. Excluding defense, new orders increased 0.3 percent.
Remember, November was reported as an increase last month. Remember, this was part of the ramp job in the market at the end of December. REMEMBER?
I’ll tell you what I don’t like though: 15.9% year over year declines in shipments, and 20.2% decline in new orders.
And it’s no better ex-transports and ex-defense – excluding defense it’s 17.8% and 21.4% and ex-transports it was 16.4% and 17.7% respectively (shipments and orders), all declines.
Looking down the sheet I see exactly one column that has positive year/over/year numbers in it – defense, up 5.3% (orders) and 21.0% (!!!) for shipments, respectively.
Unfilled orders and total inventories were down hard as well with everything but computers down double-digits. Unfilled orders for computers were up 8.8% y/o/y while communications eeked out an 0.5% gain.
Note that communications equipment is a coincident indicator of hiring in high-tech and other “good paying” jobs, since new hires typically require new communications gear such as cell phones.
There’s not a lot to see here folks, other than the fact that we’ve still got a very weak “recovery.” There were indications of improved shipments and orders in the internals of the report, particularly in primary metals and machinery – both good signs. And semiconductor shipments were up huge, but with this being the month into Christmas, that’s not a surprise (what ‘ya think goes into all the “stuff” you buy?)
But the rest of the report was lukewarm at best, and the y/o/y numbers are pretty horrid. I’m particularly non-plussed with these given that by the time we got to December of last year we were at what everyone called “the bottom” from an economic perspective – and yet we’re putting up numbers below that point – still.
Wake me up when we see annual comparisons flatten out.
That’s an actual bottom.
No Man commented:
That is what’s left of the Bush (prosperity) legacy.
Next quarter the obama idiotonomic garbage policies kick in.
Look out below!
Agent 99 commented:
Glenn Beck on his Radio Show talked about this. At Hour 2 Beck does his own State Of The Union Address Called “Fundamental Transformation Of America” So here it is ….Per Beck who says TWO-THIRDS of Stimulus I is Unspent. Look for the Demo/Nazis to Dump this money Just before the Elections. Doing so will “”make the economy look better”" BUT do not fall for this as the Prez is playing FOR KEEPS and we will be Distracted again. As for this “growth” it is Fake!! As WANUMBA says the END GAME is to TRANSFORM THE USA “”Forever” just like was done in Russia. Saul Allinsky Tactics!! Crush/Destroy/Take-Over ALL of America. GB cautions to not fall for the Growth when the stimulus is dumped just before the Elections. Remember your Children and Grandchildrens Future …per Beck!
Sojourner commented:
Chisum, there’s small good news here.. 2.2% is closer to reality w/inventory liquidation slowing. OK.. but the spending! The Feds keep printing money out of nowhere and handing over to Obama/gov’t to spend…no wonder the number,a month later,is adjusted down…politics, though. If people think, go spend, everything’s OK, then the bubble balloons again.. bad debt banks and Fed are looking to unload, can get liquidated at higher prices on American’s dime. (again) and unemployment will change little.
Dave Shemwell commented:
But GDP in the simplests terms is just the number of people working, times the hours they are working, times their productivity. Since fewer people are working it would have to be all increases in hours and productivity. Does anyone really believe we are almost 6% more productive this quarter than last. Seem like pretty strange numbers. Have the climate folk moved over to commerace.
AL commented:
” Nonfarm business sector labor productivity increased at an 8.1 percent
annual rate during the third quarter of 2009, the U.S. Bureau of Labor
Statistics reported today…”
2hotel9 commented:
GDP did NOT grow 5.7%, that is a blatant lie. This number will be “revised” in the next few days, probably on Sunday, to the actual number of 2.6. Bet your a$$ on it.
Dave? The climate liars originally came FROM DeptCommerce. And DeptHUD, DeptState, etc etc.