This thread is for the discussion of economics, macro and micro, with particular emphasis on the current US economy. Likewise, discussion of the global economy or those of specific non-US countries is certainly acceptable.
To get the ball rolling. The AP is reporting that last Q 2k9 the US economy experienced the largest growth since 2003, increasing 5.7%. This was the second quarter in a row of growth following 4 straight quarters of decline:Article
Growth exceeded expectations mainly because business spending on equipment and software jumped 13.3 percent -- much more than forecast. It's the second quarter in a row that business spending has increased, after six quarters of decline.
The report provided an upbeat end to an otherwise dismal year: The nation's economy declined 2.4 percent in 2009, the largest drop since 1946. That's the first annual decline since 1991.
Still, economists expect growth to slow this year as companies finish restocking inventories and as government stimulus efforts fade. Many estimate the nation's gross domestic product will grow about 2.5 percent to 3 percent in the current quarter and about 2.5 percent or below this year.
That won't be fast enough to reduce the unemployment rate, now 10 percent. Most analysts expect it to keep rising for several months and remain close to 10 percent through the end of the year.
High unemployment is likely to keep consumers cautious about spending. Without strong consumer spending, economists worry the recovery could falter.
"That's why there's so much hand-wringing right now," said Brian Bethune, chief U.S. financial economist for IHS Global Insight. "Can the economy really sustain this? That's the big question mark sitting out there."
Still, it's a "surprisingly good report," Bethune said, with several factors contributing to growth, including a rapid rise in exports and business investment.
Now, obviously we're in recovery mode, so such growth is to be expected. Still, it's hard to measure any sort of progress while unemployment is hanging around 10%. The traditional lag for job growth can be really brutal. Even so, knowing that businesses have something to feel confident about can be a boon on whether or not they start hiring. So we're ultimately left with the question: are things really starting to get better? Is the worst of the recession over? Or is this just a "recovery bubble"?
BTW, don't read the comments on some of these articles, yeesh. When the economy is failing it's Obama's fault, when it's improving the improvement "isn't real".
And here's a gem provided by Saammiel:http://www.youtube.com/watch?v=d0nERTFo-Sk
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