Friday, January 28, 2011

GDP Growth at 3.2% in Q4

Pretty wild release. HUGE positive impact (more than 3%) by improvement in net exports. HUGE positive impact (more than 3%) by consumption (strong demand in durable and non-durable goods). HUGE negative impact (almost 4%) by inventory liquidation to meet final demand vs. new production.

My initial thoughts? I've been looking for a bump in aggregate global demand and the jump in consumption and net exports is a good sign. In addition, the fact that we have met final demand by depleting inventories, once again feeds the cycle that businesses have to ramp up production to meet final demand going forward (which will positively impact future economic growth).

Source: BEA