GDP Rises 5.7% As Recovery Takes Hold
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The Gross Domestic Product grew at a faster-than-expected rate for the second consecutive quarter from October through December with a 5.7 percent annual rate. Economist had expected a rise of 4.7 percent.
The strong growth rate announced by the Commerce Department Is the fastest pace since 2003 and is the strongest evidence to date that the worst recession since the 1930s in fact ended last year. An academic panel that decides the duration of recession has yet to come out with a declaration of finality.
The economy followed a record four consecutive quarters of decline with the two most recent producing growths.
The fourth quarter capped a dismal year in 2009 that despite the solid growth in the second half, still finished with the economy down 2.4 percent, the sharpest decline since 1946.
The significant growth in the fourth quarter was driven by companies refilling stockpiles and spending by businesses on electronic equipment and software that jumped 13.3 percent, far surpassing the forecast.
Economists are expecting the growth rate to slow in 2010, with the current quarter expected to slow to a 3 percent growth rate and drop to 2.5 for the full year 2010.
Nearly 60 percent of the growth rate was a result of the rebuilding of company inventories as the recession’s impact on the economy is beginning to weaken. Taking away the inventory changes, the growth rate for the economy would have been 2.2 percent in the final three months of 2009, compared to 1.5 in the previous quarter.
The shipment of domestic goods oversea increased 18.1 percent, while the imports coming into the nation increase only 10.5 percent.
The complete GDP data will be released on February 26, while economist ponder the future rate of growth as inventories reload and government backed stimulus packages finish up pumping funds into the economy.
The strong growth rate announced by the Commerce Department Is the fastest pace since 2003 and is the strongest evidence to date that the worst recession since the 1930s in fact ended last year. An academic panel that decides the duration of recession has yet to come out with a declaration of finality.
The economy followed a record four consecutive quarters of decline with the two most recent producing growths.
The fourth quarter capped a dismal year in 2009 that despite the solid growth in the second half, still finished with the economy down 2.4 percent, the sharpest decline since 1946.
The significant growth in the fourth quarter was driven by companies refilling stockpiles and spending by businesses on electronic equipment and software that jumped 13.3 percent, far surpassing the forecast.
Economists are expecting the growth rate to slow in 2010, with the current quarter expected to slow to a 3 percent growth rate and drop to 2.5 for the full year 2010.
Nearly 60 percent of the growth rate was a result of the rebuilding of company inventories as the recession’s impact on the economy is beginning to weaken. Taking away the inventory changes, the growth rate for the economy would have been 2.2 percent in the final three months of 2009, compared to 1.5 in the previous quarter.
The shipment of domestic goods oversea increased 18.1 percent, while the imports coming into the nation increase only 10.5 percent.
The complete GDP data will be released on February 26, while economist ponder the future rate of growth as inventories reload and government backed stimulus packages finish up pumping funds into the economy.
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