Finally, some good news?!? GDP up by 5.7% in Q4

From the Washington Post:

"The U.S. economy roared ahead in the final months of 2009, growing at its fastest rate in six years, as corporate America stopped slashing its inventories and again started to invest for the future."

"Gross domestic product, the broadest measure of economic activity, rose at a 5.7 percent annual rate in the fourth quarter......That is the highest pace of growth since 2003, and it constitutes strong proof that the recession reached its end earlier in 2009. It was also a surprisingly positive result, well above the 4.6 percent rate of GDP growth forecasters had expected."

And then comes the "but"

"But there remained reason to doubt how strong the economic recovery will be in 2010. The biggest component of the GDP growth was a steep drop in the pace at which businesses were cutting back on their inventories. Firms reduced their inventories by $33.5 billion in the fourth quarter, compared with $139 billion in the third....that added 3.4 percentage points to overall growth."

The article lists the different types of factors that go into calculating the GDP growth and how many percentage points they added to it.

5.7% increase sounds good, but after taking in all the bad news that has been coming out the past few weeks/years, I'm still a little bit skeptical. Let's hope it turns around soon at least for my 401ks' sake. I moved all of my money into a nice "I'm retiring soon" type of fund in July of 2007 because I was convinced the end of the world was nigh. Last week I put all of it into 6 separate funds covering small, mid, large, international and real estate. It was a hunch move and weird considering the fact that I'm basically bearish. I may end up taking it in the shorts, but hopefully I got in a little early. Time will tell.


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