Savings Experiment: Snow Removal
Why Your 2012 Tax Bill May Jump By $8,000
The Commerce Department gave us a nice little surprise this morning, revising up its fourth-quarter estimate of the Gross Domestic Product. Economic activity grew by 5.9% during the fourth quarter, which was the fastest rate since the third quarter of 2003. Last month, the Commerce Department estimated that the GDP rose by an annual 5.7% during the fourth quarter. Here is the thing, this figure was in line with expectations of economists, so all of the glad handing may be a bit premature. Inventory liquidation slowed more than experts expected, which contributed the most percentage points to the GDP since the fourth quarter of 1987. Business spending increased 6.9%, which was far better than the earlier estimate of 2.9%. It added 0.62 percentage point to the GDP.
But all the news wasn't great. Real final sales of the GDP increased 1.9% in the fourth quarter. While this number was higher than the third-quarter increase of 1.5%, it is lower than the original estimate of 2.2%. Consumer spending also decreased, with a contribution of 1.23 percentage points -- lower than the originally reported 1.44 percentage points. Housing was also revised lower, down to 5.0% from 5.7% and gross domestic purchases dropped to 1.9% from an initial estimate of 2.1%.
There is a decent amount of good and bad news on both sides of the equation in this GDP report. The problem is, I think that we are going to see too much concentration on the good news and a bit of a glossing over of the bad news. My belief is that we will not see true recovery until jobs increase. In addition, we will need to see consumers spending more money as the government stimulus funds begins to dwindle. Let's hope that the market doesn't dwindle as well.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
