Very Good news for the US Economy and The Obama Administration the recession is over. The economy grew at 5.7 percent in the 4th quarter a rate larger and faster than expected. The growth however is unsustainable. Unemployment at 10 %. Consumer spending is very weak.
Many analysts predict gross domestic product will expand at a rate closer to 2.5 to 3 percent in the current quarter and 2.5 percent or less for the year.
Roughly two-thirds of the quarter’s growth came from increased manufacturing as businesses drew down their stockpiles of goods at a slower rate. But companies will eventually let those inventories fall again unless consumers — who account for about 70 percent of the economy — spend more.
Unlike past rebounds driven by the spending of ordinary shoppers, this one appears to hinge on spending by businesses, foreigners and — until it runs out — government stimulus.
To drive down the jobless rate by just 1 percentage point this year, the economy would have to grow by 5 percent for the whole year. No one thinks that will happen.