Holy crap. Does anyone believe, even for a minute, this number? I realize 3.3% of it is due to inventory investment, but still...wtf Here is the release if you guys can read Russian.
Believe the number (subject to a minor downward revision possibility). Everything the government tells you isn't a lie... Inventory restocking. Don't expect this type of growth in the future, but the reality is that USA economy is miles ahead of where it was a year ago. Been keeping up with earnings season? There are healthy companies out there that are doing just fine. I said last summer that the time to be worried about stock markets is when actual economic data is improving and rate hike rhetoric is ramped up. This is exactly what has happened. First the Chinese are putting the brakes on, and rate hikes in the USA (and likely the rest of the world) will take place this year.
Unemployment went from 6% to 10% in a year. So that means that about of people are no long contributing to the GDP (except for what they put in from their unemployment checks) So 4% of a 14 trillion dollar GDP is just over 500 billion. Government spending was at what...1.2 trillion? Not hard to see how the GDP grew 5.7% there is it?
Did not know you were so cynical. In the everything the government tells me is a lie camp. To each his own. Even the Chinese admitted that they believe economic data coming out of the USA. Also, I am thrilled that Bernanke was confirmed. I am willing to bet you and your kind are not?
Heh...I thought you were sarcastic, but I guess you're being serious. 1. I do not trust government statistics, and this GDP number will likely be revised down (like the previous one) by some 30% or so. That's being kind. We can make a gentlemen's bet on it if you like. 2. What else are the Chinese going to say? "Hi, I'm Pot. I don't believe Kettle's numbers!"? 3. Bernanke re-confirmed is a disaster. It just remains to be seen when the Senate will fully realize it. I read a quote today that said (I forget the source) "We reappoint the guy who broke the Ming vase because we thought he did a great job of sweeping up the pieces."
Thank you for this excellent breakdown on precisely how the GDP is calculated. You should teach Macro Econ.
1. I am not disputing a potential downward revision. The exact final number is irrelevant. 3.5% to 5.7% all means the same thing - healthy Q4 economic growth in the USA. 2. The Chinese did not have to say anything. The fact that they made a point of saying they believe USA numbers but not Greece speaks volumes. 3. There is some truth is you vase quote. However, only a fool could think that the Fed is the main cause for the economic troubles. Saying Bernanke was the one who broke the vase is false. He was in the same room with the guys who broke the vase, but it was not his decision to let the bull in the vase shop to begin with.
I guess we can agree to disagree, but the GDP number, if buffeted by massive government spending, is not healthy by any means. France has a positive GDP number (or did prior to this recession) but I don't consider it a healthy economy. Ours is even worse so as we borrow from future GDP (through taxation and debt). As for the Chinese, they were comparing Greece to the US in that instance, which is essentially like comparing a Buick to a bowl of JELLO. And Bernanke may have been in the same room as the guys who broke the vase, but he certainly wasn't yelling "Watch out for that vase!".