I was expecting it to be lower,but dam.
And your point?[*-)]
Well how much of that growth is from Federal money you know?
The stimulus had its biggest impact in the third quarter, and thus without another stimulus most of the 4th quarter growth would be the product of an inventory bounce.
What do you mean by ‘inventory bounce’?
Inventory bounce is a term used in economics to describe an economy’s bounce back to normal GDP levels after a recession.
Firms usually keep a certain amount of inventory. When an economy faces a recession, sales might be unexpectedly low, which results in unexpectedly high inventory. In the next period, firms cut production so that inventory will drop to their desired levels, which results in even lower GDP. Subsequently, firms might increase the production back up to maintain the usual level of inventory, which causes the GDP to bounce back. This bounce back is called an inventory bounce. We care about it because if GDP recovers is only an inventory bounce, the recovery of GDP might not be sustained, which means that economy might not have truly recovered from the recession.
[edit]http://en.wikipedia.org/wiki/Inventory_bounce
If it wasn’t so late, I’d enjoy finding out how the “stimulus” actually stimulates the economy. I understand how deficit spending can increase GDP, but I don’t understand what that has to do with the economy. I just don’t understand what is to be gained by analyzing changes in GDP.
GDP is an estimate of total economic activity.
Yes, I know. It’s just that I am skeptical about what it really measures and what it really means, or how useful it is in understanding how the economy works.
GDP estimates our a good figure but they underestimate the size of economy but a lot,but this is understandable because our economy is so large. So yes there are some limitations to GDP but it is perhaps one of the best economic indicators. Sometimes I will use Annual growth,but I mainly stick with GDP.
GDP is not going to tell us how the economy works, it just tells us if growth is occuring or not.
If there is an inventory bounce, then what? The recession continues? And the policy prescription would be? More printing by the Fed? More deficit spending? I’m not trying to be flippant. I’m truly curious: If the recession continues, then by implication, is government intervention necessary to counteract its effects?
Right now the recession is pretty much over,but if GDP rises mainly because of an inventory bounce it means that our economy is weak.
Right now we are not in a reccesion but our economy is still very weak because of high unemployment and inventory bounces are only temporary.
The recession ended in the third qaurter,but it is still very weak. The weakness is atributed to 10% unemployment and the fact that inventory bounces are only temporary.
Aren’t unemployment figures actually around 20%? I remember hearing the present figures are tampered with in order to decrease the percentage. Anyways, what is the true judge of the end of a recession? Is it unemployment? A decrease in inflation? An increase in investment?
Government stimulus and interference has propped up GDP numbers with phony schemes like “Cash for Clunkers” and by subsidizing failed industries, inducing continuous malinvestment. Furthermore, the government is doing everything it can to prop up housing prices in aid of its economic delusion, and for its friends and partners in the banking and mortgage industry.
You say the recession is over. Then why isn’t the dollar bouncing back? Why aren’t we seeing “over-valued” gold taking a dip? Nobody believes this recession is over except those naive enough to drink the government’s statistical Kool-Aid. This is going to go on for a very long time. The more government interferes, the more like 1929 it’ll turn out with America taking over two decades to pull itself out of the cesspool.
U3 estimate=10.1%
U6 estimate=17%
When it comes to unemployment i look at the jobless claims rate.
Historically GDP is usual the first economic indicator to recover,while unemployment is usually the last.
Then you ignore many other factors.