Because GDP is a critical measure of economic growth in the United States, I like to start every term discussing GDP with my students. Gross Domestic Product, or GDP, has many limitations. It doesn’t tell us about unemployment or productivity, or whether economic growth will be sustainable over time. However, it tells us about consumer spending, private business investment, government spending, and net trade. Therefore, GDP is an important measure of economic performance and one of several economic indicators driv
To me this is a positive sign because the number has gone up. This is not a definite that it will keep rising, but it is a good start. It is better than dropping. Although, it doesn’t show other important facts, for example, unemployment or that it will continue to rise, it does show that people are spending and businesses are investing. I think we should be optimistic because the number has gone up. I think a few of the reasons why the GDP went up is because people are spending money and companies are making investments to try to better the economy.
Because GDP is a critical measure of economic growth in the United States, I like to start every term discussing GDP with my students. Gross Domestic Product, or GDP, has many limitations. It doesn’t tell us about unemployment or productivity, or whether economic growth will be sustainable over time. However, it tells us about consumer spending, private business investment, government spending, and net trade. Therefore, GDP is an important measure of economic performance and one of several economic indicators driving fiscal and monetary policy in the United States.
Last week, the Commerce Department announced GDP for the 4th quarter of 2009 was up 5.7%. I will share my thoughts on that number with you next week, but I would like to give you a chance to post your opinion first. Do you think this number indicates sustainable economic growth? What component or components of GDP is or are responsible for the increase?
The previous quarter resulted in a 2.2% increase. According to the New York Times, in 2009 the gdp at 5.7% grew at it’s fastest pace in more than six years, even as businesses resisited hiring and proceeded to do more with less. “It was an excellent report, but it’s not clear how sustainable this growth is” said John Ryding, cheif economist of RDQ economics. The beggining of the year was a terrible start but 2009 was finsihed strong at a very high gdp. Companies have figured out ways to produce the same amount but with less workers. These changes the companies have made have kept the economy rolling and productiity at a good level. In my opinion one of the only was to sustain the econimic growth is to fix the job market. As long as unemployment stays high, consumers will be less willing to spend their money therefore the future of the econimic growth is questionable.
The GDP for quarter 4 of 2009 is a great sign. All through 2009, there has been a negative GDP, but in quarter 4, the change to 5.7% is a strong indicator of economic growth, not only due to it’s size, but that it happened after a recessive trend. Although the total GDP for 2009 is -2.4%, the recent rise in percent shows that the recessive trend is ending, and that spending is on the rise. The falling GDP, lasting through late 2008 and 2009, has now been interrupted this increase. Hopefully, this dramatic change in GDP percentage is signaling a change in the economy.
Though in general fourth quarter figures in the United States tend to be slightly higher than that of previous quarters due to the northern hemisphere’s agricultural harvest and seasonal (holiday) spending I believe it is too early to tell if economic recuperation will continue obstreperously. Though production is up some of that can speculatively be attributed to the financial crisis in Dubai. The United Arab Emirates is a major exporter of textile goods such as clothing and electrical cable and mineral resources such as aluminum and oil which account for 82.2% their exports (Economy Watch) and roughly $156 billion dollars of imports to the U.S. according to the Bureau of Economic Analysis (BEA). The fourth quarter financial crisis in Dubai would have likely hurt not only the timeliness of its textile exports (cheap textiles and items are extremely popular during the holiday season as most Americans are hunting items at prices too low to facilitate domestic production) but also the ability to export in general. I mentioned timing, the timing of the crisis was absolutely crucial. I opine that with the Dubai crisis happening so close to the American holiday season many retailers/importers were unable to switch suppliers of these cheap textile products to suppliers in places like China, India, or Guatemala and were forced to buy from domestic suppliers of these goods. While this definitely does not account for the full amount of the GDP increase (this year also showcased some huge efforts involving socially conscious spending movements such as Oprah’s pet project “RED”) it likely did cause a slight economic bump for American manufacturers. I believe the pertinent Grecian aphorism is “one man’s misfortune is another man’s gain”.
Since GDP went up 5.7% in the fourth quarter, and became the highest growth rate since 2003 (Commerce Department), I believe it’s an indication of economic growth but not so much sustainable. Although the stock market rose significantly after the news on friday (CSMonitor), people are still going to be more careful on how they spend their money having experienced a recession. The growth rate of the fourth quarter still has to go under revision by the Commerce Department for another month but i think it would be safe to say that the economy is sustainable when the 10% unemployment rate in the US (Bureau of Labor and Statistics) goes back down to the “normal” 5 or 6 percentile. Once people are confident on their job security, they will start spending money, knowing that theres still going to be another paycheck coming.
GDP increases in Q3 and Q4 of 2009 are a positive sign for our economy, but is this a definite indicator that the United States’ economy will be on an consistent upswing in the near future? According to Nickels, McHugh & McHugh’s “Understanding Business,” the three major economic indicators are the GPD, the unemployment rate, and price indexes. Unemployment rates, according the the Bureau of Labor & Statistics, have been on a steady increase. From a total of 7.4% of the nations citizens being unemployed in December of 2008, that number has risen to an even 10%, as of December 2009. Price index, according to the BLS as well, is inconsistent. From -0.8% in December of 2008, price index in the United States has fluctuated from a peak index of 0.8% in June 2009, to a lower 0.1% in December 2009. I agree with ryanc’s previous post, and i also believe that the future of economic growth is questionable. For the economy to maintain a state of growth, the three economic indicators (GDP, unemployment rate, and price index) must all be on a consistent positive trend. As of right now, only GDP has potential for consistency, but only further watch on our economy will tell.
I do not think the 5.7% increase in GDP for the fourth quarter indicates sustainable economic growth. First of all, it is an advanced estimate released by the Bureau of Economic Analysis and is based on data that is incomplete and subject to further revision. Second of all, as Catherine Rampell of the New York Times stated, 3.4 percentage points of that growth was not due to consumers buying more, but rather businesses letting their stockpile shrink at a slower rate. She goes on to add that the unemployment rate rose to 10 percent and “As long as the labor market remains weak, consumers — whose purchases make up the bulk of economic output each quarter — will be reluctant to spend money.” For these reasons, I do not believe the 5.7% increase indicates sustainable economic growth.
In part the 5.7% growth of GDP is a positive sign for the recovery of the economy. Because as Robert J. Barbera chief economist at ITG, said “What goes down wildly has to go up at a pretty good clip,” and that’s exactly what happened with consumers spending more and businesses having less workers. Also, businesses letting their inventories to sell slowly, helped the GDP increase. However, as it is stated in the New York Times, those inventory changes alone cannot sustain growth over an extended period of time. And we’ll have to wait until the final revision for the GDP comes out to see if this increase of 5.7% continues to be positive economic growth.
The new york time quoted “The United States economy grew at its fastest pace in more than six years at the end of 2009, even as businesses resisted hiring and continued to do more with less.” In my opinion the 5.7% gpd will keep going up with less product from from company. For example the new york time stated that one of the reason that gpd when up because the consumers buying more, but businesses letting their stockpiles shrink at a slower rate than they had been previously. Also another good reason that new york time stated that could increase the gdp is that gpd has been able to grow even without adding workers , because employers have found ways to accomplish more with fewer workers. My final example that on the way that gpd could grow is that business are getting new equipment that will be able to hire new employ that could get them more product out in the market. so there for are my reason gpd will keep increasing the following years to come.
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The fact that the GDP rose 5.7% in the fourth quarter of 2009 is a positive sign for our economy. The New York Times stated that “The economy grew at its fastest in more than six years.” Companies are now producing the same amount of goods and services with a less amount of workers, and consumers have also been spending more, which is why the GDP rose 5.7% in the fourth quarter or 2009. Its great that the economy is bouncing back right now, but since companies are using less workers, this could also show signs of falling right back to where we started with less people having a source of income more people will have to control spending. Right now the rise of the GDP is a good sign, but we will have to wait and see if this trend continues.
I believe the 5.7% increase of the GDP in the fourth quarter is very promising for the Unites States. Cathrine Rampell wrote in the New York times that the GDP grew it’s fastes pace for more than six years in 2009 as businesses resistes hiring and continued to do more with less. Although business arn’t hiring people yet, Obama made a poposal that would give companies a tax credit of up to 5,000 dollars for a new hire to the company and also add additional credit on social security payroll taxes for companies who increase hourly pay or increasing work hours ( rampell, N.Y. times) .I beleive without jobs opening up there will be slim to no increase next quarter. Without jobs people are worrying about where there money will be coming from next. They don’t want to be out spending money or making investments. Americans want to be able to earn there money through work. If the GDP expects to keep rising within the next few years companies and businesses really need to hire Americans and let them earn some money!
The GDP for the fourth quarter rose 5.7%, one whole point higher than economists had expected, but when dissecting the number we find that it is misleading and unsustainable. According to Andre Damon of link removed, the number represents, not a growth in consumer spending, but in fact an “inventory bounce”, which is the slowing down of the rate at which companies reduce their warehouse inventories. The $33.5 Billion dollar cut in the fourth quarter was much less than the $139.2 billion dollar slash in quarter 3, therefore resulting in the deceptive growth. This very well could have been a result of the holiday season and the increased spending it promotes, therefore, requiring companies to maintain more inventory in their warehouses. At this point the rise in GDP is not sustainable and will continue not be until we see more critical, contributing factors to overall GDP growth, such as uninfluenced consumer spending and private business investment.
I do not think that the 5.7% growth in the last quarter of 2009 is something that can be sustained. I believe this because 5.7% is a blistering pace for a country that is not only in a recession but also has a high unemployment rate. After looking closer to see why this quarterly growth was so artificially high, I found out that the reason for this sudden growth was due to companies refilling their stocks. In fact out of those 5.7% points of growth we have had, 3.4% of those points came from inventory rebuilding, leaving us with a more believable 2.3% points of growth. This reason for growth is not something that can continue since eventually production of goods will slow down to adjust to the levels of demand. These levels of demand will happen to also be fairly low due to the high unemployment rate in the country.
I believe that the growth of the GPD of 5.7% is a positive sign to look at since it increased instead of declining. This increase is showing that people are continuing to spend money and businesses are still finding ways to invest. This also shows that unemployment is not totally affecting the GPD. However i believe if more people have more there will be more spending going on with will also help GPD increase. The only concern now is to see how long this growth will continue since there are no signs indicating that it will increase steadily.
I believe the 5.7% increase in the fourth quarter of 2009 does not indicate a sustainable economic growth. 5.7% is the highest GDP increase in six years, but most of that is contributed by companies, not consumers. The New York Times states “The single biggest factor in the strong growth rate last quarter was not consumers buying more, but businesses letting their stockpiles shrink at a slower rate than they had been previously.” This added 3.4% to last quarter’s increase, and without that the GDP would be back to a normal rate. Therefore, I do not believe the recent 5.7% GDP increase indicates sustainable economic growth.
I think that 2009’s fourth quarter GDP of 5.7% is a positive sign that economic growth is sustainable. The fact that the fourth quarter GDP of 2008 was negative shows that if in one year the GDP can incease this much, who knows how high the GDP for the last quarter of 2010 will be. According to the New York Times, 2009 growth rate was the fastest since the third quarter of 2003, rising 2.2% from the third quarter. Even though the economy has risen not by hiring more workers but by employers finding ways to work with fewer, I believe that when business’ have seen how high the GDP rate is they will not be so hesitant to hire new employees. Looking on the positive sign, 2009’s fourth quarter GDP of 5.7% shows that economic growth is sustainable.
The GDP went up to 5.7% in the 4th quarter however I don’t think that this number indicates a sustainable economic growth (New York Times). One of the reasons is most businesses resisted on hiring and continued to do more with less, our economy is driven by consumer spending (New York Times). The second biggest factor in the strong growth rate last quarter was not consumers buying more, but businesses letting their inventories shrink and because of the way the government calculates growth, this interprets into an increase in output, the result is the change in inventories adding 3.4 percentage points to the growth rate in the final quarter and the inventory changes alone cannot sustain growth over an extended period of time (New York Times). Finally, the third was consumer spending grew at an annualized pace of 2% in the 4th quarter and the sales to consumers and businesses have been disappointing (New York Times). At the end of the day the GDP should have resulted in just a 2.3% rise when you remove the 3.4% gained from the inventory reductions and business aren’t restocking their warehouses, so this shows a GDP of 5.7% will not be sustainable (New York Times).
The GDP has its critics and I am one of them. Anyone that took a high school economics class knows that the GDP is an illusory that can be misleading. We correlate the GDP with standard of living and let the media frenzy that follows blind us. Most investors showed exuberance in Q3 when the advanced GDP rose 3.5% in the third quarter. But the (BLS) later revised its advanced report and it was lowered to 2.2% and that exuberation quickly thawed. I’m very wary about this latest GDP of 5.7 %, we all know that it’s an advanced report and that according to the (NYT) 3.4% of that growth was due to businesses restocking inventory or trimming them at a slower rate. That leaves us at about 2.3% as of now and if the same happens as it did in Q3 that leaves us at 1%. The GDP is misleading; the economy actually shrank 2.4 percent as a whole in 2009 and the unemployment rate is at 10%. I don’t think it’s time to pop the “CRISTAL” just yet. I’m betting against huge growth spurts in the next few quarters like this latest report perpetrates. I have to see this Fridays unemployment report and the real estate market has make a couple more leaps (-17% in December) (NAR) before I agree that this growth is sustainable. With that said no one really knows what’s going to happen in the coming quarters its all speculation. People think the GDP is a crystal ball that predicts the future .But If it takes good reports with underlying weakness like the GDP to move the market create jobs and get us out of this mess then I guess it’s good for us to be deceived and told things are on the upside.
In my opinion, I do believe that the numbers do provide substantial economic growth. According to The New York Times, there has not been such a substantial growth since 2003! The Obama administration is encouraging businesses to hire more people. When they hire someone new, ” the companies would receive a tax credit of up to $5,000 for each new hire”. This should motivate the large companies and businesses because in the long run, they will end up with more money, rather then less.
Without a doubt, the numbers do not provide substantial economic growth. The economy has grown without adding any new workers or raising wages, states The New York Times. One the reasons the economy grew was because production companies weren’t producing any new products, they were just using up all the products that they had in their warehouses. Another reason as to why this will not help out economic growth is because the unemployment rate is at 10 percent as compared to 9.7 percent, according to The New York Times. This means that with less people working, the less they will spend because the have little to no money.
For my own educational opinion, i believe this 5.9% Gross Domestic Rate is a positive shaping outcome to a stronger economic growth spurt. I can imagine this number only climbing if inventories are purchased off, buisnesses casting off these inventories will result in a sustainable climb of gdp. Through the decending of such inventories by companies will gdp capitolize. Stuart Hoffman stated ” the data shows that the necessary transitions from goverment stimulus to private sector spending is underway, which essential to sustain economic expansion”. Reading all may evidence I was able to obtain by the Commerce Department I believe inventoires from such companies are the main source of such a dilema.
According to forecasts.com the GDP rate was jumping up each quater about 6 % each quater in the 1990’s thru the early 2000’s and continued up until the ression. the GDP rate has gone down only once in late 2008 and early 2009 from the preivous quater since we have started calculating GDP in the late 1940s. GDP seems to be on the uprising since apirl 2009 and has steadly increased since that time. i dont feel like that statistic is goin to chage this economy around any time soon.
I feel that the GDP increase is a good sign, because it shows that the American people are investing in more products and taking more risks then they were in previous years. GDP which is the output of goods and services produced by labor and property located in the United States, has increased at a rate 5.7% in the fourth quarter of 2009 as told by the Bureau of Economic Analysis. The GDP increase reflected positive contributions from private investments, exports, and personal consumption. The motor vehicle output added .61% to the change in GDP, although the final sales of computers subtracted .03% from the fourth quarter change. So I feel that the increase in the GDP shows that the economy is overcoming the struggle that they have faced and will soon be back to normal.
The GDP increase in the fourth quarter is a definite positive sign that the economy is heading in the right direction, But it is also too early to tell if this trend will continue. The GDP hasn’t been near this percentage since the first quarter of 06. We cannot tell if this will continue or if it will roller coaster over the next couple years. People are still scared to spend money in these hard times, but people need to realize that if we don’t spend money the economy will never grow back to what it once was. What needs to be done to ensure that the economy will stay at this increasing pace is to make sure that people are getting jobs. Without people working and making money there is no one to invest it back into the economy. The 5.7% increase this past quarter is a good sign after the rough year we had, but this trend won’t continue if the unemployment rate doesn’t start descending.
When looking at the 4th quarter report by the Commerce Deparment, even though GDP rose 5.7% for the fourth quarter I still feel that it does not always mean that we have had sustanible economic growth. According to an artile in the Huffington Post written by Harry Moroz, “Like any model, the measurements involve choices about which variables to include and which to exclude”. This means that this number quoted by the Commerce Deparment could have left out vital statistics. Moroz also stated, “We persist with a poverty measure that is grossly outdated, with Pell Grants for low-income students that are not pegged to inflation, and continued with an unemployment rate that last month was either 9.6% or 16.5%, depending on “how unemployed” the unemployed actually are. Looking at these facts, even though GDP rose 5.7%, there are still many underlying factors that are still showing a sign of a poor economy.
The Commerce Department annouced an increaseof 5.7% the GDp for the 4th quarter of 2009.
Per the Bureau of Economic Analysis, U.S. Dept. of Commerece “the pick up in growth reflected a slowdown in the rate businesses drew down inventories”, also “reflected an upturn in business investment and in addition, imports rose less than in the 3th quarter.”
“These contributions were partially offset by slowdowns in federal spending, consumer spending, and residential housing.”
I don’tthink growth ofGDP is sustainable at this rate because the recovery lacks overalll strength as shown inthe weakness of retail sales in Dec which declined .3% per Secretary Locke of the Commerce Dept. The Commeerce Dept. also reported that “construction spending dropped sharply in Dec to its lowest level in 6 years.”
Until comsumer spending picks up and housing starts pick up GDP will show more modest growth in 2010
The GDP increased from 2.2 percent in the third quarter to 5.7 percent in the fourth quarter, which seems to be a step in the right direction. This is the second quarter in a row with positive economic growth and the fastest growth the US has seen since 2003. According to the Commerce Department, the increase in GDP “primarily reflected positive contributions from private inventory investment, exports, and personal consumption expenditures.” However, with the unemployment rate still high, consumers are not spending as much money. I don’t think the economy will recover on a sustainable basis until the job market is fixed.
According to the NY times in an article by Rampell she said The growth rate was the fastest since the third quarter of 2003, when the economy grew at a rate of 6.9 percent.” They say its a fast growth which is saying it is not sustainable. “…fourth-quarter surge was not enough to overcome a terrible start to the year.” This is showing that our nation is still not at a good place because the year end still did not in a good place. After looking at a chart from the Commerce Department it shows after surges like this there have been a decease in quarters after.
My opinion on the GDP for the fourth quarter of 2009 is that it looks good on paper but the reality is that the government has invested much more money in this current quarter than any other. The government is spending billions of dollars to help out certain sectors in order to keep the economy afloat. The cash for clunkers and the first time home buyers tax credit are two such government driven programs. My opinion is that the 5.7% does not indicate sustainable growth. If the government hadn’t interfered and allowed the invisible hand of the economy to hit rock bottom this quarter and America as it always has, would rebound on its own in time.
I don’t think an opinion of whether or not the 5.7 percent growth in the GDP can be justified. The fact is it was at its highest in six years time according to the Wall Street Journal. This was due to more business owners investing in new equipment and not using preexisting products in the warehouse. This isn’t a huge number by any means and there is much more growth to be had, but beggars cant be choosers. Its a lot better than the 2.2 increase last quarter. Growth is growth.
I think that the 5.7% increase in the GDP for the fourth quarter of 2009 is non-sustainable. According to Kimberly Amadeo, an economist for About.com, “the economy would have only grown 2.3% without the inventory adjustment”. That means that businesses inventory adjustments accounted for 3.39% of the GDP. Real Estate and consumer spending, two of the most important factors, actually declined in the 4th quarter. Although this is only an advanced estimate and can change dramatically by the time of the official number, to me this shows that our economy does not look to be sustaining itself.
The 5.7% might be the most the GDP has climbed in a long time, but it isn’t something people should be getting hyped up about. John Ryder, cheif economics at RDQ Economics states that there isn’t evidence of a sustainable pace of growth. Many factors have created the rise and the last couple quarters. But then again, it’s better than having the GDP decline. If the government and businesses can figure out what were the biggest factors in the GDP rise, then they can work together to do the same thing to keep the GDP up.
According to Robert Carreira in his “2009 – Economic year in review” there were 7.2 millions people that have lost their jobs in the first 11 months of the 2009 year. The unemployment rate was at 10.2% the highest since 1983. He also goes to say that by the end of 2009 the state of Arizona had a $2 billion deficit meaning GDP has really small number to even think that the economy is getting or is back on track. Like Arizona most other states are in the same situation. To me this 4th quarter of 2009 fisical year means nothing if the numbers dont keep increasing by the quaters to pay off all the deficit these states have and go on and pay all the difecit the federal goverment has. We have to wait atleast one more year to see if we are back on track!!!
From the first day I heard about GDP, I don’t have much confidence in believing that this shows us how the country is doing, and if we are out of the recession. GDP shows us the market value of goods and services produced by labor and property in the United States, regardless of nationality. It does not consider anything outside the market place such as health and education. We started the 2009 year horrible as far as GDP is concerned, but strongly rebounded and ended with a strong finish. According to the New York Times The third quarter has been revised from a 3.5% increase to only a 2.8% increase, and the fourth quarter the GDP increased 5.7% some of it to with the fact that oil prices were very high. I will end this by saying the in the same article at The New York Times the fourth quarter was the highest % increase in 6 years when in 2003 the third quarter had a increase of over 6%.
I do not believe that this number increase on the GDP indicates sustainable economic growth. As said by John Ryding, chief economist of RDQ Economics, “It was an excellent report, but it’s not clear how sustainable this pace of growth is.” After doing some research I found that this growth rate was the fastest since the third quarter of 2003, when the economy grew at a rate of 6.9 percent. But unfortunately, even though the numbers shown for the fourth quarter report of 2009 are very good, it was not enough to overcome a terrible start to the year. This latest quota of the country’s productivity is a backward-looking figure, providing only indications of where the country may be headed.
According to the New York Times, GDP increased from 2.2% to 5.7% in the fourth quarter of 2009. Although the increase shows signs of rapid economic growth, I do not believe that there is enough sustainability to allow GDP to increase steadily. The nation’s unemployment rate as of January 2009 was 7.2%, and that number increased to 10.2% while we approached 2010. If the rate of unemployment increases at the same pace as GDP, it is hard to believe that GDP will sustain over time. If the nation’s unemployment rate keeps increasing, people will be spending less. When people spend less, the nation’s economic growth will not be sustainable.
Yes, I think that the number 5.7% is sustainable economic growth. For one thing according to the New York Times “The broadest measure of economic activity, gross domestic product, expanded at an annual rate of 5.7 percent in the fourth quarter, after a 2.2 percent increase the previous quarter”(Rampell).” “The economy has been able to grow even without adding workers because employers have found ways to accomplish more with fewer workers. Productivity grew at a robust rate of 8.1 percent in the third quarter of 2009, the most recent data available((Rampell).”Although “economists are hoping that once business executives become more confident about the recovery, they may increase production to refill their stockroom shelves( Rampell).” After read this article fully I have changed my mind I don’t think that number 5.7% is sustainable economic growth.
GDP is the market value of all final goods and services made within the borders of a country in a year. GDP = Private Consumption + Gross investment + Government spending + ( Export – Imports). We have to keep in mind those Concepts. Gross measures production regardless of various uses to that production can be put. Domestic measures the production that takes place within the country’s borders. And the Private Consumption that concern of welfare economics. I think the GDP represents a big impact in everyone’s economic. So if our economic is good and we dont have to see a lot of unemployment that means company can increase wages, have a lot of profits and can help that our economic grow.
No, I don’t think this number indicates sustainable economic growth, based on health care alone it state that, “The paper estimated that U.S. health spending hit $2.5 trillion in 2009, up 5.7% from the previous year. That represents 17.3% of gross domestic product, up from 16.2% in 2008, because the overall economy shrank last year. A decade from now, health spending is projected to hit about $4.5 trillion a year.” I would have to increase more than 5.7%.
No, I don’t think it indicated econmic growth. As time continues the economy gets worse and worse. Jobs are more scares and they’re getting more scarce. Just last year my mother get laid off and there were over 250 job listings that she could apply for. This year, there’s less than 50. Jobs are being elliminated and not just a couple in businesses. Thousands across the country, leaving people homeless or worse, sick, because they coudlt not pay for health insurance. The economic growth is NOT getting better it;s getting much worse.
Not really familar with this but I dont think it indicated ecominc growth. EVeryday the ecomony gets bad. Where there is people losing theres completely or not able to find jobs. Yeah it make have went up but for how long.
According to the Bureau of Economic Analysis the 5.7% increase on the fourth quarter was better than the third quarter growth which was 2.2%, “the fourth quarter primarily reflected positive contributions from private inventory investment, exports, and personal consumption expenditures”, however they claim that the data shown was incomplete and will once again be revised and shown to public on February 26, 2010. As we can see by the statistics shown, there was an increase in the fourth quarter of 2009, even though that is a good start, that is not the only thing that makes up the economy, and in order for us to get out of this critical financial situation we have to decrease the percentage of unemployed in America so we can get back on track and keep on moving. Hopefully as the economy starts to pick up more jobs will be created and everything will stabilize once again.
No I do not think that this shows economic growth. Although this number is the greatest increase in a long time I don’t think that it shows that our economy is getting better. Our unemployment rate has increased but yet somehow the GDP has increased. If the unemployment rate continues to increase i just dont understand how it is that the GDP will continue to increase because if people are making less they are going to spend less.
Also, according to a couple sources I read online, the GDP would have been the same as last quarter if the businesses had not been letting their stockpiles shrink. This has created a spike in the GDP but has really not affected the overall picture.
The Rise of the GDP
According to the New York Times, the GDP grew at a vigorous pace
for the forth quarter of 2009, but economist still worry about the the
sluggish job market. The rise of the GDP in the forth quarter was the fastest in three years, according to the wall street journal. The rise of 5.7% was far above the estimates. In my eyes the rise of the GDP in the fourth quarter of 2009 was a good way to end.
I believe that the 5.7% increase in the GDP for the fourth quarter of 2009 does indicate some positive outcome for our economy.According to The Bureau of Economic analysis, what contributed to the increase in the real GDP this last quarter was Private inventory investment, exports and personal consumption expenditures. People are spending more compared to what they were spending in 2008. New York Times said the GDP was struggling in the beginning of 2009 but the year finished off well due to this increase in the GDP. In the fourth quarter of 2008 the GDP decreased even more from the already decreasing numbers throughout 2008. Comparing how much the GDP decreased in the fourth quarter of 2008 to the fact that it Increased and not decreased in the fourth quarter of 2009 I would say it’s a sign of good things to come as far as the economy goes.
GDP is an important measure of economic performance that tells us information about consumer spending, private business investment, government spending, and net trade. GDP expanded at an annual rate of 5.7% in the fourth quarter. According to the New York Times, A major factor in the strong growth rate was not the fact that consumers are buying more, but rather that businesses are letting their stockpiles shrink at a slower rate than they had previously been doing. This means that companies started to cut production and sell what they have in stock. The New York Times stated that because companies have let their stockpiles shrink at a slower rate, productivity has grown 8.1% in the third quarter of 2009. Although this change indicates strong economic growth I do not think there is enough sustainability to allow for GDP to increase at a steady pace. A big factor in whether GDP will continue to increase is unemployment. If the unemployment rate continues to rise at its current rate consumers will stop spending, therefore GDP will not be able to sustain substantial growth at a steady rate.
Although the GDP rose to 5.7% in the fourth quarter of this year, I do not believe this is a great sign of sustainable economic growth. The fourth quarter of the year typically does not heed a reliable number when speaking of sustainability. First of all, holiday shopping is higher than other points in the year, which could be the reason for the increase in consumer spending. Another reason for the raise in GDP could be the proposed increased government budget, with President Obama’s administration pouring money into trying to combat the high unemployment levels, according to the associated press. Time will truly tell if consumers are in fact getting back on their feet, and if the government’s plans will help curb unemployment rates. I do not however think that fourth quarter numbers are to be believed too highly, because of the increased holiday spending.
I believe that the rise of GDP for the 4th Quarter is a good sign, at least its not decreasing, over the years we were in some trouble with our economy, and as long as the GDP is increasing little by little we are improving our economic growth, as long as little by little GDP is increasing then we should not see any problems with our economy, that being said although GDP is not the deciding factor for stabilization in our economy as a whole, at least it is some form of tool for measuring sustainability, I’m all for increase.
I believe that the economy will recover after what has happen. in some aspect of my knowledge, some retail companies have drastically shatter in sales. however consumers are still buying, even buying more thanks to P&G ( Procter & Gamble) who are issuing lots of manufactures coupons. “According to the Bureau of Economic Analyst, 2009 third quarter percentage increase by 3.5 over second quarter decrease of 0.7 percent. I recently ask Betty Crockett whom, she shops at the same store every day. Why were you not here yesterday? Betty Crockett response was ” I need to save money! Every goods has gone up on price and I don’t know if tomorrow I would have a job!” I was shock , but I understand, at least we have her business! Thanks for reading Chappelle show….