2. The 5.9 GDP has to be digested with big caution as one crucial component of the equation is the price of goods and services and on the other hand its adjusted by a phony far too low inflation. Hence the GDP is literally inflated as 2-4 % of that number is nothing but hidden inflation. The government knows that and therefor its a disgusting approach of Obama's transparency and change team to still come up with such numbers as it is deception and fraud to claim such numbers to be the state of the US economy.
Fourth-Quarter Growth Beats Estimates; GDP Up 5.9%
The U.S. economy grew faster than initially thought in the fourth quarter as businesses drew down inventories at a much slower pace and boosted investment, a government report showed on Friday.
In its second reading of fourth-quarter gross domestic product, the Commerce Department said the economy grew at a 5.9 percent annual rate, rather than the 5.7 percent pace it estimated last month.
It was still the 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 5.7 percent rate in the October-December period.
While the economy rebounded strongly in the second half of 2009 from the worst downturn since the 1930s, data so far suggests the rapid rate of acceleration slowed somewhat in the first quarter of 2010.
A sharp brake in the pace at which businesses liquidated inventories combined with increased spending on equipment and software to boost growth in the fourth quarter, offsetting lackluster consumer spending and residential investment.
Stripping out inventories, the economy expanded at an annual rate of 1.9 percent, rather than the 2.2 percent pace estimated last month, indicating growth was not being driven by demand.
Business inventories fell only $16.9 billion in fourth quarter instead of $33.5 billion estimated last month. They dropped $139.2 billion in the July-September period. The change in inventories alone added 3.88 percentage points to GDP in the last quarter.
This was the biggest percentage contribution since the fourth quarter of 1987.