GDP Grows 5.7% in Q4

Good economic news.

The economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest in more than six years, as businesses made less-aggressive cuts to inventories and stepped up spending.
The Commerce Department said on Friday its first estimate put fourth-quarter gross domestic product growth at its fastest pace since the third quarter of 2003. The economy expanded at a 2.2 percent annual rate in the third quarter.

Two consecutive quarters of growth do not a recovery make, but it’s a good start. The article goes on to backpedal a bit, pointing out that around 3.5% of the overall growth was due to inventory liquidations dropping. But hey, 2.2% to the good is a lot better then contraction. Overall, the economy shrunk 2.4% for all of 2009.
We’ll see what happens next quarter. It wasn’t clear to me from the article, but it sounded like there won’t be nearly the boost available next time around from inventory liquidation cuts, so the actual number may be a bit more “realistic”. It will also likely be smaller. But if it’s greater than 3 – 3.5% we may be on the road to real recovery.