More anemic growth in the first quarter of 2010…
The “recovery” looks like taking quite a bit longer.
In normal recoveries, growth should be well above 5%, enabling more people to be hired.
At 3.2%, unemployment will remain high.
In fact, the Administration is still forecasting 8% unemployment in 2012!
Gorilla says: “The scale this time is more or less Lionel!”
Fourth quarter 2009 GDP revised downward, uh oh!
Take away inventory replacement, and growth’s actually an anemic 1.7%.
That’s not enough to do a damn thing about unemployment, and it’s certainly not a recovery from recession, when measured by previous historical standards, as Mark Thoma illustrates:
Gorilla says: “Going nowhere is the new arriving!”
Today’s headline GDP number for Q4 2009 is 5.9%, an upward revision from the initial estimate of 5.7%…
But consumer and residential spending in the same quarter were revised downward.
Message: growth was mostly in inventories, consumer demand remains weak, and the housing market’s moribund.
In Movingforwardville, the headline number will be greeted with confidence, but in Goingbackwardville the numbers say it will be a long time before anything other than a jobless recovery comes to pass.
Gorilla says: “Read between the lines, and you’ll find the proper signs!”
5.6% growth in the 4th quarter, hooray!
Alas, and assuming the figures aren’t revised downward (as they were in the previous quarter), most of that growth was inventory replacement.
The underlying economy’s growing by 2.2 percent, while consumer spending, aka 70% of the economy, grew by 2 percent.
It’s good news for Wall Street, but it’s not yet good news for Main Street.
Growth isn’t strong enough to foster hiring at even population replacement rates, let alone at a pace that actually increases the labor force.
Equally unsettling, our leaders in Washington may conclude that this growth rate negates the need for additional stimulus and our central bankers in New York may conclude that we need to start raising interest rates and fight nonexistent inflation.
Of course, this isn’t the case, but wars of idiocy have been launched on far less evidence.
Gorilla thinks: “GDP does not employ the land of liberty!”
2.2%, revised down from 3.5% in the third quarter!!!
This is a truly anemic performance, particularly given the various schemes to move up sales of autos and homes.
Taken together with the very high jobless claims, the US economy is looking at a lost decade.
Will this finally get Congress off the can and passing much more stimulus, particularly a new public jobs program? Very doubtful indeed.
Gorilla says: “Health care reform? The economic patient’s already on life support!”
