Yesterday, the Commerce Department estimated that fourth quarter GDP went up a wonderful 5.7%---the biggest increase in six years.
But let's take this with a grain of salt.
Third quarter GDP estimates initially were of an increase of 3.5%. Subsequently, this estimate was revised twice, in a downward direction, ending in a very modest 2.2% increase. Which was attributed to government intervention in the market place because of car and housing tax rebates.
These fourth quarter estimates are also expected to be revised to lower levels of growth, because the supporting data just isn't there.
Personal buying in fact decreased. Interestingly, auto sales fared worst of all and actually worked to decrease the GDP. Which is what happens when you mess with the free market.
Good news is that private investing increased and that exports were actually a tiny bit on the positive side instead of on the negative side where they've been.
Also to note is that even taking into account the 5.7% increase (which may, of course, turn out to be too high) the overall GDP for the year is a negative 2.4%. As in a decrease--for the whole year.
We shall have to wait and see.
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