The 5.9% in line report (seasonally adjusted annualized pace) up from the original 5.7% report. Don’t be surprised if this gets revised down, like Q3 was . .  .

The revision shows final sales in the US were weaker than originally reported last month. Business investments and exports were higher, but Inventories were bigger (meaning, the reduction of inventory backlog was also slower). Nearly two thirds of GDP growth for Q4were changes in inventories — not final sales.

Rex Nutting points out that even with the big Q4 GDP, U.S. GDP was down 2.4% in 2009 — the worst showing since 1946 (down 10.9%). Rex also notes “In 2009, business investment fell the most since 1942, while imports fell the most since 1946.”



via Barron’s Econoday

Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Q4 GDP = 5.9%”

  1. call me ahab says:

    “Nearly two thirds of GDP growth for Q4were changes in inventories — not final sales.”

    enjoy 5.9% while its here-

    you won’t see that number again for a long time

  2. bsneath says:

    1) Wage and salaries in the third quarter fell $63.9 billion annualized, instead of rising $20.1 billion as earlier reported.

    2) Exports will likely contribute less in future quarters because of the stronger dollar.

    3) Higher inventories imply less need to rebuild going forward.

    4) Direct government spending fell at a 1.2% annual rate. State and local governments are continuing to cut back on employment and spending in order to balance their budgets to lower tax revenue (such as ad valorem cuts from declining housing prices & little new construction.)

    Where will future growth come? Will business investment be a sufficient driver?

  3. tradeking13 says:

    It looks like the deflator dropped from 0.6% to 0.4% resulting in the 0.2% bump in GDP.

  4. W T F says:

    Font problem alert!

  5. frankinomaha says:

    Rex Nutting points out that even with the big Q4 GDP, U.S. GDP was down 2.4% in 2009 — the worst showing since 1946 (down 10.9%). Rex also notes “In 2009, business investment fell the most since 1942, while imports fell the most since 1946.”

    My question is did government stimulus spending(in the form of war spending) drop in 1946? So what happens when the current stimulus spending drops off? Will we then drop 10.9% ?

  6. bsneath says:

    Existing home sales down, new home sales cratered, jobless claims up, consumer confidence down, weak metrics in the GDP, stock market jumps. So what does Mr. Market know that I don’t?

  7. ewmayer says:

    So, aside from continuing job losses, continued deleveraging and reduced spending by even-still-employed consumers, massive contraction in credit and zero or negative net new business creation, housing prices which were only temporarily kept from falling further by government subsidies which pulled demand forward (and similarly for that other big-ticket consumer-purchase item, automobiles), a renewed drawdown in inventories (which means no wave of new-job-creation is coming), and deeper pessimism about economic prospects (by everyone aside from”most economists”) than has been seen in over a generation, “the economy” is recovering. To paraphrase one of Mr. Obama’s campaign-speech zingers (aimed at John McCain) from Fall 2008, “which economy are they looking at?”

  8. cognos says:

    Uh… its funny to see the mention of “downward” revision — in a post about UPWARD REVISION!

    I have noticed many numbers revised up lately. Durables goods orders dissapppointed a bit yesterday… but BOTH the prior month numbers were revised UP by more than 1%. No comments here about that?

    But its great to just try to dig for evidence to support your “feeling”. Thats a high quality process. Its probably very profitable too. (Its so obvious the trade is recovery… the numbers have supported the case wonderfully since last April… continue to support it very well.)

  9. hgordon says:

    @bsneath

    I would hazard to say that the growth will come from business investment, and while the numbers are probably small relative to what debt-fueled consumer-based consumption might affect, this is the long-term basis for rebuilding the US economy.

    As regards Mr. Market, those numbers seem to be mainly fueled by Fed-induced liquidity. You can quote Barry on this from his Tech Ticker interviews.

  10. flipspiceland says:

    GDP is a fiction. Based on a fallacy. Founded on a myth. Built upon sand.

    As is the CPI.

    These numbers are essentially meaningless. Likely no one with any savvy uses them as a barometer against which to measure true economic progress.

    A$5.00 loaf of bread vs a $3.00 for the same loaf is not an increase in GDP. But it “is.