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That's the final, pathetic growth number for 2011.
From the just-released GDP report:
Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual level), compared with an increase of 3.0 percent in 2010.
The increase in real GDP in 2011 primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
Pierpoint Securities chief economist Stephen Stanley notes the bulk of the increase — nearly 2 points — came from inventories. A big increase in inventories is not a good sign because it means companies aren't selling as much and need to cut back on production.
Even so, both figures were below the average speed of economic expansion in the United States since World War II. And it would take above-average growth to recover the ground lost during the Great Recession.
“At this rate, we’ll never reduce unemployment,” said Justin Wolfers, an economist at the University of Pennsylvania. “The recovery has been postponed, again.”
Yet about two-thirds of the increase stemmed from a buildup in inventories. Businesses may have accumulated excess stock on hand and didn’t sell as many products as expected during the holiday season, analysts say.
Inventory spending surged to an estimated $56 billion after a $2 billion decline in the third quarter.
“Overall, the pick-up in growth doesn’t look half as good when you realize that most of it was due to inventory accumulation,” said Paul Ashworth, chief U.S. economist at Capital Economics.
As a result, most economists expect companies to cut back on inventories in the first three months of 2012. Growth is expected to slow to 1.9% in the first quarter, the latest MarketWatch forecast shows.
“The economy gathered some momentum in the fourth quarter, but the result was still below what many were hoping for,” said Jim Baird, chief investment strategist at Plante Moran Financial Advisors.
Reflecting the disappointment, U.S. stocks fell in Friday trades. In a healthy economy, GDP usually grows 3% or more each quarter.
Originally posted by newcovenant
reply to post by surrealist
Surprised more people didn't comment...