The economy shot up at a pace of 5.9 percent in the fourth-quarter of 2009, exceeding government expectations of 5.7 percent and prompting optimism about the current year. The improvements though, are not expected to last into 2010 as sales of previously occupied homes plummet and stocks seesaw.
The reading, released Friday by the Commerce Department indicated the largest growth for the economy in six years. The most recent figures though indicate it can not carry over into the quarter that ends in March of this year.
Manufacturing shot up in the fourth-quarter prompting many to believe that demand was up. Rather, many companies were replenishing stockpiles for the first time in an extended period after letting supplies dwindle to dangerously low levels in order to cut costs. This growth accounted for nearly two-thirds of the total GDP growth for the quarter.
Now that the stockpiles have been renewed, many expect growth to subside significantly. Recently released figures aren’t helping matters as consumer confidence fell by a much larger margin than predicted and unemployment is predicted to remain around a stagnant 9.7 percent for some time.
Additionally, more initial jobless claims than expected were received last week.
With this in mind, alongside weak home sales, the National Association for Business Economics is estimating economic growth at only 3 percent for the first quarter of the year. The second and third quarters, though still distant are predicted to be in that same range.
About EQUITIES:
Since 1951, EQUITIES Magazine has been a leading media company providing business editorial content designed to serve the needs of business leaders, professionals, institutional investors and retail investors. We are focused on business and the business of making money, not on lifestyle subjects. We publish original reporting in print and on our website, as well as select content at www.nasdaq.com. For 28 years we have hosted our own branded investor conferences that connect public company CEO’s with our loyal readers in the investment community.
Sign up for a free one-year subscription
