This is a great article. We believe consumer spending and confidence will create jobs and lead us out of this economic downturn.
Please read this great article by Don Lee at The Los Angeles Times
January 29, 2011
The economy grew at a 3.2% annual rate in the last three months of 2010, driven by stronger consumer spending and trade, the Commerce Department reports. Economists expect the recovery to pick up momentum this year, though a shadow still looms over employment.
Reporting from Washington —
The American economy registered moderately stronger growth in the final three months of last year, buoyed by rising exports and the biggest increase in consumer spending in four years, the Commerce Department said Friday.
Economists said the private sector’s bigger role in driving growth suggests that the 18-month-old recovery will begin this year with stronger momentum, even as the lingering effects of the devastating recession continue to cast a shadow over the economy and especially over employment.
“What’s clear from the data is that the economy is recovering and that the recovery is sustainable, but it’s not growing in a way that will create a lot of jobs,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, N.C.
The Commerce Department said the nation’s gross domestic product — the sum of all goods and services produced inside U.S. borders — expanded at an inflation-adjusted annual rate of 3.2% in the fourth quarter of 2010. That was an improvement over the 2.6% GDP growth in the third quarter.
Ordinarily, 3.2% would be seen as a solid number. But at the current early stage of the recovery, following a recession that eliminated more than 8 million jobs, “it’s subpar,” said California State University economist Sung Won Sohn.
For all of 2010, the U.S. economy grew by 2.9%, returning to the size of its pre-recession level. By contrast, in 1984, after the deep recession of the early ’80s, GDP jumped by 7.2%.
Still, economists were heartened by the latest data because they showed a very sharp increase in demand for American-produced goods and services. Whereas government stimulus and companies ramping up depleted inventories propelled the recovery earlier, private-sector spending is now taking the lead.
Consumer spending rose 4.4% in the fourth quarter, about double the pace of the prior three quarters.
The resurgence reflected the best holiday retail sales since 2006 and strong gains in the stock market, which helped bolster confidence and purchases of big-ticket goods that consumers had put off during the recession.