The economy ended 2009 with a whopping 5.7% growth rate for the fourth quarter. Before you pop the bubbly, you must realize a few things:
- This is an advance estimate. It could drop a point or two by next month, when the second estimate comes out.
- The growth is based on businesses stocking up low inventory, which added 3.39 points.
- Real estate and consumer spending actually slowed in Q4. These are needed to sustain any lasting recovery.
The economy would have only grown 2.3% without the inventory adjustment, according to econo-blogger Calculated Risk.
What It Means to You
Even a 2.2% growth rate means the economy is technically out of recession. Recessions are usually defined by two consecutive quarters of negative GDP growth. Job losses will continue, however, since growth needs to be 3% or more for businesses to add jobs. For a history of all GDP reports since 2007, see GDP Current Statistics. (Source: GDP News Release)
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