Virginia Economic Indicators, Volume 41, Number 4. U.S. Outlook 2010, Virginia Indicators for Fourth Quarter 2009, Summary Analysis and Revised Benchmark, and Historical Graphs

摘要

The rousing 5.6 percent growth in fourth quarter 2009 GDP should not lull us into a sense that the ills of the economy are behind us. While this growth is reassuring and offers a sense of calm in an otherwise dark and onerous period, we need to be mindful of the origins of this surge in GDP. As most of us know by now, the surge was caused by a sharp increase in the inventory cycle; that is, producers of goods were increasing inventories in the fourth quarter as opposed to cutting inventories as we saw in the third quarter GDP data. This increase will not last as we anticipate GDP in the first quarter of 2010 to be at a more sustainable level of around 2.6 percent. Moreover, there are reasons to believe that GDP will hold strong and steady through 2010 and perhaps end the year with a level of 2.9 percent in the last quarter of the year. There were, however, positive sides to fourth quarter 2009 GDP that were a welcome sight.