Wed 3 Feb 2010
Picture du Jour: GDP – what it really looks like
Posted by Prieur du Plessis under Economy, Investment
By now we all know that a swing in inventories flattered the growth in U.S. Q4 GDP. The chart below, courtesy of Goldman’s chief US economist Jan Hatzius (via Clusterstock - Chart of the Day), shows the “real” story. It illustrates that the growth in real final demand - basically GDP excluding inventory restocking - is flat and doesn’t live up to past recoveries at all.
“There will be lingering headwinds to growth from the financial meltdown, such as ongoing credit restraint and an upward drift in the personal savings rate. The U.S. economic recovery should be sustained, but it will fall far short of what would normally occur in the wake of a very deep recession,” said BCA Research.
Without stronger demand growth, a V-shaped recovery is not on the cards and the unemployment rate will not start heading south.
Email
Digg
Del.icio.us
Technorati
Stumble
Reddit
Facebook2 Responses to “ Picture du Jour: GDP – what it really looks like ”
Comments:
Leave a Reply
Trackbacks & Pingbacks:
-
Pingback from Bullet Train: The Week’s Best from the Web 2.13.10 | Wall St. Cheat Sheet
February 13th, 2010 at 4:35 pm[...] GDP Minus Inventory Restocking is Flat by Prieur du Plessis at Investment Postcards [...]
Email
Twitter
RSS reader
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif)
February 4th, 2010 at 7:06 pm
What am I missing in this picture?
Final Demand, although tracking lower than the 1954 - 1990 period, appears well on track - at least for now - to match or exceed 1991 and 2001.
Do others see the same thing?