The BEA 's advance estimate of GDP for the fourth quarter (October-December) 2010 was 3.2 %. This is better than Q3's 2.6% economic growth rate, and greater-than the 3% rate needed to generate a lot of jobs (see analysis at Calculated Risk).
Jolly holiday sales helped drive the growth, contributing 4.4%. The biggest drag? You guessed it - residential construction. The overhang of foreclosed homes in the "shadow inventory" will keep economic growth from breaking out of a 2-3% range for at least this year. In most recoveries, residential construction leads the way, driving growth to a robust 4-5% level - enough to create lots of jobs.
For a history of all GDP reports since 2007, see GDP Current Statistics.
What It Means to You
A 3.2% growth rate means the economy is definitely out of recession and not in danger of a double-dip. Still, you can expect slow growth for awhile. A high foreclosure rate is dragging the economy by stifling bank lending.
One way to profit during a slow-growth economy is to stay focused on what value you provide to your customers. And, yes, even if you are a salaried employee working for a company, you have customers. They are your co-workers, your boss, and your company's owners - which could include stockholders. Stay in tune to their needs, and make sure they know the value you provide. This value is your competitive advantage and your brand promise.
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- What Is the Business Cycle?
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Comments
The “shadow Inventory” is going to drag this economy down in many ways. I bought a business in another town. I am commuting as much as possible, because I can not sell my home. Other companies I know well are unable to fill key positions because people who can take the job are unwilling to walk away from an existing home and take a huge loss. I know the simple answer is everyone has to get used to it. It is the new world. How did all of the banks get well in 2 years but the housing did not. Where is all the bad paper that the Fed had to buy up to save us all?
One out of four believes the economy of US will improve, that is about 25% and the rest 75% don’t have confidence of improving.That 25% of people should come to reality in life and this indicates that 75% are some what in real terms.Americans already said that the country will not come to the status of pre 9/11 and in fact the country faced a lot of problems from the day of 9/11 and still recovery is not in sight.They are all doing irreversible mistakes and nobody can understand how else in the world the subprime lending occurred in US and without caring for the priniciple amount of the mortgage, and the lenders offered interest only payment without caring for the priniciple and that is hit very hard on the country and they dont’t have any idea to come out of it even after two years of crisis and who knows it never ends.
@chan
I should think that one so concerned about the economy’s status, and one who seems to know so much would at least have correct grammar…
Hi Kitty,
Let’s keep in mind that many people who comment on this blog live in countries where English is a second language. The viewpoints of people outside this country give a fresh perspective and help us stay aware of how the U.S. is viewed from afar. I’m OK with sacrificing a little grammar to keep on top of those points of view.
Kimberly
Dear Kimberly:
The way to prosperity is to solve the foreclosure crisis.
In other words Foreclosure Solution Will Decrease The Unemployment Rate, and the States and Federal Government Deficits. That is the title to one of my articles.
I have been writing about the solution to the foreclosure crisis for years.
A full and sustainable recovery will occur when the financial institutions adopt the new mortgage terms that I believe will eliminate the “shadow inventory” and increase the middle class’s disposable income; at the same time strengthen the financial institutions.
Kimberly if you can find a flaw in the People’s Economic Recovery Plan I surely will want to discuss it with you.
Recovery will come from the middle up to the top, not from the top down. Banks do not create demand. Businesses do not hire people until they see more people come through their doors willing and able to purchase their products and services.
Goggle (foreclosure crisis solved) or my name Leonard C. Tekaat and you will find the solution to the foreclosure crisis. The Middle Class’s Rebuttal Speech to President Obama’s State Of The Union Address and many more articles. Such as How the Fed Can Do More Harm To The Economy.
I am a retired economic analyst and economic scholar. Former candidate for Ca. Congress. Chairman of a special committee For Economic Reform and A Better Economic Future.
Ms. Amadeo Please check out my sites They are all listed at the bottom of the Fed letter. Together maybe we can change our country’s future, and end the misery created by the Great Recession of 2008. I would like to discus the Plan with you.