Strong Economic Growth in Q4 2009
Despite the discouraging stock market performance so far in 2010, economists continue to suggest that the recession had ended and we are experiencing economic (re)growth. Further evidence in support of this claim arrived Friday in the form of a quarterly growth report from the U.S. Commerce Department.
According to the report, the U.S. economy grew by a rate of 5.9 percent in the fourth quarter of 2009, surpassing the initial forecasts of economists. Not only did we do OK, we did better than expected. Optimism was the theme of the day, with the research branch of Bank of America issuing a report declaring "the worst is now officially behind."
But we're not out of the woods yet. The U.S. Chamber of Commerce "[doesn't] expect that [growth] to continue this year" and doesn't change the 3 percent forecasted growth "one iota."
It's also important to recognize that the 5.9 percent Q4 growth was not indicative of the year overall. During 2009, the overall economy shrank by 2.4 percent. The growth experienced during the final quarter was only a minor boost at the end of a year-long slump.
The economy is expected to continue growing as a whole, but we can't let ourselves get wrapped up in small victories. While it's exciting to see better-than-expected growth in the final months of 2009, we have to contextualize it within the overall trends. We're doing better, but we still have a long way to go.