Sickly recovery

29 January 2010 By Martin Hutchinson

Headline economic growth was an annualized 5.7 pct last quarter, but net of inventory rebuilds the gain was only 2.2 pct. Meanwhile, prices rose at a 2.7 pct rate. The payments balance and savings rate improved, but U.S. growth is sluggish and inflation looks to be edging up.

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Real U.S. GDP increased at an annual rate of 5.7 percent in the fourth quarter of 2009, according to the advance estimate published on Jan. 29. For the year, GDP decreased 2.4 percent in 2009 from 2008, the largest decrease since 1946.

Of the 5.7 percent annual rate increase, nonfarm inventory increases accounted for 3.6 percentage points. Final sales increased at a 2.2 percent annual rate in the quarter, after a 1.5 percent increase in the third quarter.

The price index for personal consumption expenditures increased at a 2.7 percent annual rate.

The savings rate was 4.6 percent in the final quarter and for 2009 as a whole.

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