Growth Spurt

The final revision on Q4 2009 GDP numbers is out, and it's actually fairly good news on the surface.

Gross domestic product expanded at a 5.6 percent annual rate, the Commerce Department said in its final report for the fourth quarter, instead of the 5.9 percent pace it estimated in February. It was still the fastest pace since the third quarter of 2003.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 5.9 percent rate in the October-December period. GDP increased at a 2.2 percent pace in the third quarter.

The department also said after-tax corporate profits grew 6.5 percent in the fourth quarter, slowing from a 12.7 percent rise in the prior period. It was below market expectations for a 10 percent gain. For all of 2009, after-tax profits fell 6.9 percent, the biggest decline since 2000.

Growth in GDP was lowered because contributions from business investment, consumer spending and inventories were revised down.

And then the bad news:

Much of the economy's recovery from the most brutal downturn since the 1930s has been driven by government stimulus and businesses being less aggressive in reducing inventories.

This has raised concerns that growth could sputter later this year when the boost from the two sources fades, given tepid consumer spending and high unemployment.

The good news is the stimulus worked.  The bad news is it was far too small.  Obama and the Dems may have won the battle on health care reform, but another stimulus package will be impossible because the GOP has no interest in seeing the economy improve, not when it's far easier to do nothing and blame Obama. The growth we've seen in the last several months is only because of the stimulus.  When it runs out, so does the economy.

Right around, oh, campaign 2010 season.