Economics Update

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Worst post-Depression recession
H/t Economic Policy Institute

So, US GDP grew at a 5.7% annual rate in the 4^th quarter, according to the advance estimate from the Bureau of Economic Analysis.

Some points: First, 5.7% is a spectacularly good number, the best in about 6 years, second, I expect that as more data comes in, future revisions will be downward, third, much of this growth was from a low "deflator" number, basically meaning that the numbers were juiced by the extraordinarily low inflation numbers, and fourth, as Krugman notes, it was an inventory blip, with over half of the growth being restocking of depleted inventories, not real growth.

Even with this number, as the graph pr0n shows, we are still down from peak more than any other recession since WWII.

Still, the Reuters/University of Michigan Surveys of Consumers was up more than forecast, to 74.4, and given that consumer spending is most of our economy, it is a big deal.

As to energy and currency, the GDP numbers did what was expected, with the dollar strengthening, and the stronger dollar pushing oil down.

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Just in, in 2009, wages and benefits rose the least since statistics began to be kept in 1982.