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4Q09 GDP No Cause for Optimism January 29, 2010

Posted by geoff in News.

The GDP numbers for 4Q09 came out today. Here’s some insight into what analysts were expecting:

In a research note released last night, Goldman Sachs raised their estimate of Q4 GDP from 4.0% to 5.8%. They cautioned that the “headline will be an eye-popper”, but that this growth is mostly due to inventory changes: “More than two-thirds of our estimated increase comes from a sudden stabilization in inventories”. They also noted “anything between 4½% and 7% is possible given the volatility of the inventory data”.

And the actual (1st estimate) number is: . . . . . . . 5.7%!!

So Goldman Sachs just about nailed it. Since they were so dang accurate, what else did they have to say?

The rest of the note cautions on 2010, and Goldman still sees sluggish growth of just under 2.0% with the unemployment rate peaking in early 2011.

Remember that when the administration trumpets the fourth-quarter numbers.


1. HeartlessLibertarian - January 29, 2010

And notice that the market dropped like a stone today after trying to ramp up off the news.

I think Goldman set a bull trap.

2. Patterico's Pontifications » Obama’s $3.8T Budget - January 30, 2010

[…] and that recent 4th Quarter 2009 GDP of 5.7%? It may be due to inventory changes, and analysts expect continued sluggish growth and high […]

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