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The economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest in more than six years, as businesses made less-aggressive cuts to inventories and stepped up spending.The robust performance closed out a year in which the economy contracted 2.4 percent, the biggest decline since 1946.
After falling off a cliff at the start of the year, gross domestic product turned higher in the third quarter, and the quickening fourth-quarter pace reported by the Commerce Department on Friday suggested a sustainable recovery was building.
But even stripping out inventories, the economy expanded at an annual rate of 2.2 percent, accelerating from the 1.5 percent increase in the third quarter, reflecting relatively strong performance from other segments of the economy.
I do think the effect of fear on the retail part of the economy is strong. People are still afraid. Example: Last year, sales of vegetable seeds were up 40%. Suppliers of seed envelopes ran out for the first time in 30 years. This year, a lot of places are already running out of seeds. Although I've been gardening so long I buy my seeds in November, most people don't buy until May. To see companies running out of seeds now is just incredible and reflects the fear that people have that springs out of a general feeling of doom. I can't believe how many of my customers are bringing doom up to me when they call about something. They are afraid not only that the economy is going to get worse but that things are going to totally fall apart. Last year I had a few like that. This year it is common with my callers. "I feel like I need to prepare, the way things are going."
And I don't think this fear is just a product of media manipulation. There is so much unemployment now that everyone knows someone who has lost his/her job.
see this in todays news:
Factory activity fueling modest economic recovery
Factory activity hits highest point since 2004, but construction and income data remain weak
NEW YORK (AP) -- Hopes that America's factories will help drive the economic recovery gained support Monday from news that manufacturing activity grew in January to its strongest point since 2004.
Other data, though, offered a reminder that the recovery remains fragile. Construction spending sank in December to its lowest level in more than six years. And gains in personal income and spending were too modest in December to suggest that consumers can fuel a strong rebound.
"Right now we're getting a recovery," said Michael Gregory of BMO Capital Markets. "But you have to be skeptical. This kind of performance cannot be sustained unless we get those other areas that are still weak in the economy to contribute to growth -- housing, construction, real consumer spending."
This doom and gloom will end with the continued good news sprinkled around.
added, here is the link
The guv spending is priming the pump, that is the way Keynsian economics works.