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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Fourth-quarter GDP revised upward to 5.9 percent

Fourth-quarter 2009 gross domestic product was revised upward to 5.9 percent from its initial reading of 5.7 percent, the government said moments ago.

Quarterly GDP is always reported with an initial number, then, after more data comes in, a revision is reported.

Fourth-quarter GDP was helped by spending effects of the government's $787 billion stimulus and also by companies restocking their inventories, which they allowed to diminish during the recession.

The question going forward is: How long can positive GDP be sustained as the effects of the stimulus wear off and unemployment remains near 10 percent throughout the rest of the year? Was fourth-quarter GDP a sustainable number or a one-time Red Bull jolt that will collapse once the government stimulus is removed?

By comparison, fourth-quarter GDP in the United Kingdom was revised upward from 0.1 percent to 0.3 percent, illustrating how stagnant conditions are in Europe.

gdpQ4_09 (2).gif

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By Frank Ahrens  |  February 26, 2010; 8:43 AM ET
Categories:  Data , Fed Reserve , The Ticker  | Tags: GDP  
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Comments

Want to create jobs? In the United States, I mean. Pass a law that stops the United States government from purchasing foreign goods.

A good example is stimulus money going to alternative energy projects. 80% of those dollars are going to China to purchase equipment.

Posted by: BigTrees | February 26, 2010 8:53 AM | Report abuse

A good example is stimulus money going to alternative energy projects. 80% of those dollars are going to China to purchase equipment.

Posted by: BigTrees | February 26, 2010 8:53 AM | Report abuse

-------

Do you have facts to back up that claim? Or is this another Hannity and Limbelch talking point?

Posted by: dlpetersdc | February 26, 2010 8:57 AM | Report abuse

A government subsidized GDP doth not an economy make.

This article features a pathetic blanket statement covering the specifics.

How much in goods and services were produced from the private sector????

I would guess next to nothing.

Posted by: ANTILIB | February 26, 2010 9:09 AM | Report abuse

A government subsidized GDP doth not an economy make.

This article features a pathetic blanket statement covering the specifics.

How much in goods and services were produced from the private sector????

I would guess next to nothing.

Posted by: ANTILIB | February 26, 2010 9:09 AM
___________________________________________

I think you're right and you make the perfect argument for the need of the govt. stimulus during the collapse. Without it there still would have been no economic activity from the private sector (as you noted) and the economy, instead of growing 5.9 percent, would have collapsed even further and caused more job losses..."A government subsidized GDP doth not an economy make." - nor was it intended too, but it has helped to buffer a collapsing private economy.

Posted by: diebrucke | February 26, 2010 9:41 AM | Report abuse

I see that everyone commenting is well schooled on keynesian economics....government intervention is meant to spur or sustain the economy during a downturn. The pickle the US is in is that during six years of so-called economic expansion (2002-8) we were deficit spending (see tax cuts, 2 wars and 30% growth in discrentionary spending) Now, we really cant afford to.

And Mr. Ahrens, I dont know if you are serious, but it's laughable to suggest that the 4th quarter GDP is sustainable. Of course it was boosted by stimulus, and it's growth from a reduced base. We havent had real 6% GDP growth in America in a long time and likely never will over a sustained period.

Posted by: megatron57 | February 26, 2010 9:44 AM | Report abuse

This shows that the stimulus worked. Had we not had it, growth and job loss would have been far worse. And, the author fails to realize that many stimulus, especially infrastructure, projects are yet to be realized. In my own area of Virginia, most of the bridges and school construction, funded by the stimulus, have yet to break ground.

Posted by: jmkark | February 26, 2010 9:45 AM | Report abuse

You see, you see. I see it took the same amount of time for the GDP to come back in the same amount of time it would have taken if we had done nothing. You prove yours and I'll prove mine.

Posted by: houstonian | February 26, 2010 9:50 AM | Report abuse

Results from Intel and other companies back up the growth numbers. The government spending does spark growth, as it has in all other recessions, and will sustain the economy until other sectors of the economy take off.

Posted by: merrylees | February 26, 2010 10:03 AM | Report abuse

Inventory increases incease GDP but we never initially know how much of the inventory increase is intended and how much is unintended in the sense the sellers expected to sell this portion rather than invest in it.

Posted by: russellrk | February 26, 2010 10:03 AM | Report abuse

The story about this one specific alternative energy stimulus project spending 80% of its money on equipment from China was reported last week by both ABC World News and a headline story in a news brief on MSNBC.

Posted by: BigTrees | February 26, 2010 10:17 AM | Report abuse

M&A activity also increases GDP but decreases employment in a cascading fashion.

When two companies become one that eliminates management and support teams. It also usually eliminates one set of suppliers. The cascading job loss continues.

Posted by: BigTrees | February 26, 2010 10:20 AM | Report abuse

To the proponents of government spending as a stimulus / stop gap to the economic contraction:

The government produces NOTHING. They do not provide a good or service for which they earn income. They create NO VALUE for which anyone willingly pays.

The money they spend are the tax dollars they collect from business and you and me. (Except for the dollars they accrue by issuing debt and the money they "borrow" from contribution pools like social security.)

"Foaming the runway" now - with public money - will only make matters worse in the long run.

Posted by: ciakd812 | February 26, 2010 10:21 AM | Report abuse

To the proponents of government spending as a stimulus / stop gap to the economic contraction:

The government produces NOTHING. They do not provide a good or service for which they earn income. They create NO VALUE for which anyone willingly pays.

The money they spend are the tax dollars they collect from business and you and me. (Except for the dollars they accrue by issuing debt and the money they "borrow" from contribution pools like social security.)

"Foaming the runway" now - with public money - will only make matters worse in the long run.

-- Is this comment for real? The government is a customer, not a producer. The goal is to spur demand when private sector demand craters.

Posted by: megatron57 | February 26, 2010 10:26 AM | Report abuse

REDUCTION OF HEDGE FUNDS' PRESSURE ON EURO - automatic taxation on hedge funds via IMF pro-rated issuance of 10% of world GDP to national treasuries. Controlled, targeted inflation transfers value from hedge funds to national treasuries.


If there is really $[[Thn/]]675 Trillion in money in hedge funds, the world governments should be able to take 10% of that via every world government issuing themselves an allowance equal to their GDP divided by total world GDP ($360 TT) times $67 TT . The resulting inflation would 'devalue' he funds form $675 to $600 TT and Greece would get $375 BB / [kn]... = 0.1% X $67 TT = $67 BB worth of allowance.

Posted by: randomsample | February 26, 2010 10:28 AM | Report abuse

The government continues to perpetuate the belief that the economy is improving with bias and manipulated information.

Posted by: OldHippie | February 26, 2010 10:28 AM | Report abuse

BOND INSURANCE LINKED TO EQUITY

http://www.facebook.com/topic.php?topic=14178&uid=220881313383

...The FED is trying to play the role of insurance fraud investigator.

But, requiring bond holders to also hold an equity position in the
underlying asset that generates the bond cash flow would result in more responsible management of the asset because [[thn/]] in the event financial arson was NOT successful, instead of still holding a bond that promised a fixed rate of return, the insurance policy holder would also hold an asset that had been diminished in value by the attempted financial arson.

Now you could buy insurance to protect yourself against asset
depreciation also, but...

(...CONTINUED)

Posted by: randomsample | February 26, 2010 10:34 AM | Report abuse

BIOGRAPHICAL SKETCH - "Don't judge a book by it's cover"

Posted by: OldHippie | February 26, 2010 10:28 AM | Report abuse

=========NH:
Yes, who is a Woodstock Nation general, the second eldest grandson of a Wall St. family and a New York Judge's family; xref: *My Grandfather's Son* (Thomas, Clarence)
===========Null Hypothesis//

Posted by: randomsample | February 26, 2010 10:40 AM | Report abuse

The government produces NOTHING.

=========Null Hypothesis:
The government produces certainty, aka, reduction of risk. "You get
paid to take a risk. You pay to avoid taking [exterior sound]..."

The government is endowed with sovereignty - a scarce, productive,
natural resource with alternate uses.

The government 'sells', and 'rents' sovereignty.

Legal tender is a transferable receipt of (limited) sovereign
authority. (Continued...)

http://www.facebook.com/topic.php?topic=14242&uid=194572276570

REDUNDANT SOURCE: http://www.facebook.com/topic.php?topic=14242&uid=194572276570

FOOD, SHELTER, CLOTHING, & SAVINGS (CERTAINTY) [[tn/]]

Posted by: randomsample | February 26, 2010 1:09 PM | Report abuse

the economy shrank and left out tens of millions of people...
their are things we can or cannot do...
but one thing we can do is legislate that all imported items be assembled in the United States for security reasons...
that all drug trials be made in the united states...
in other words...
legislate back part of the jobs moved overseas as a matter of national security...

Posted by: DwightCollins | February 26, 2010 5:28 PM | Report abuse

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