Saturday, January 30, 2010

Here’s Some GOP Grief

Here’s a story you won’t see on Faux Noise.

gopVision 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.

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…

Inserted from <TPM>

The GOP won’t see the evidence here that the stimulus plan is starting to produce results, because like ostriches, they also have keep their heads somewhere the sun doesn’t shine.


the walking man said...

While the statistic is good it too is not real to main street in that it reflects fewer lost jobs and minimal job growth. What it does indicate is that The Whatever Widget corporation is again producing some inventory. But remember the statistic is a comparative analysis done quarter by quarter and they are comparing to some pretty shitty quarters.

It's good to see positive growth but we will need something on the order of 10-12 quarters with similar numbers to see unemployment reduced to the marginally best of 3-4%.

otis said...

I agree with Walking Man about needing more quarters of growth for us to truly get out of the recession.

Also, Preliminary GDP is a near ficticious number. It will be revised twice more. Furthermore, in July, the Commerce Department revises the entire previous year's numbers. So, this number can change radically by the time it is settled.

Finally, there is still a lot of government money in the pipeline propping up this number. During the course of this year, a lot of that money will start easing out of the numbers. I don't think that future numbers are going to look this good.

Suzan said...

I'm with Otis and Walking Man.

You have to have a belief that printing money and giving it to the goons at the banks (buying their toxic debts) has actually stimulated widget manufacture in addition to funny money manipulations that we have now been told were so lucrative to those banks that they deserve bonuses.

I don't believe any of it. It will be years before real widget manufacture occurs in this country.

But that's just me.


What it does indicate is that The Whatever Widget corporation is again producing some inventory.

Lisa G. said...

An increase in the GDP doesn't mean jack shit unless there are jobs behind it. Yes, we may be turning the corner, but until companies start hiring again, we're back to square one.

Suzan - thanks for agreeing with the husband (Otis). He's a pretty smart guy considering he's a recovering republican. I've done some good work here. Or brainwashing, whatever.

TomCat said...

I agree with you all. That's why I said that the stimulus is starting to produce results, not that it has produced accedptible results.

In a recovery, GDP improves early on. Infortunately employment is among the last things to improve.

otis said...

TC, that is not necessarily true. The idea of 'jobless recoveries' only came about recently, maybe the past 15-20 years. Before that, there was no such thing.
The mere idea of a 'jobless recovery' just goes to show just how badly the numbers have gotten manipulated over the years. This latest GDP number is no exception. It is really badly manipulated. It would not surprise me at all if part of Fed balance sheet 'helped' the GDP along into better territory. I don't blame Obama for using, but I do discredit him for not making it correct.

TomCat said...

Otis, I don't claim to be an economics expert like some here, but if my memory serves, I learn in college in the 1960s that employment is a lagging economic indicator.