Fourth quarter GDP growth “beat expectations,” exciting some journalists on Jan. 29. But a number of economists were downbeat.
The 5.7 percent growth for the last quarter of 2009 sparked media reactions on both MSNBC and CNN.
Savannah Guthrie declared on MSNBC’s “Daily Rundown” that “If they could do a jig at the White House, they would.” Joining that discussion, NBC’s Chuck Todd asked, “So is the recession over?”
CNN business correspondent Christine Romans said that the fourth quarter growth, coupled with the third quarter growth “suggests it [the economy] is coming out of that horrible, horrible Great Recession.”
Romans did caution viewers that the number would be revised – likely downward just as the third quarter 2009 GDP had been revised – but that didn’t dampen Gerri Willis’ enthusiasm.
“It’s great news for consumers out there. I think that’s a real shocker on the positive side,” Gerry Willis said on CNN’s “American Morning.”
Many experts remained cautious and attributed the large jump to inventory growth. Liberal economist and New York Times columnist Paul Krugman wrote on his blog that “The Blip Cometh.”
“As expected, a big GDP number (pdf), signifying nothing much. It’s an inventory blip: topline growth at 5.7 percent, but only 2.2 of that is final demand,” Krugman wrote.
MSNBC consulted Washington Post columnist Steven Pearlstein and CNBC’s Steve Liesman.
Liesman said, “Let me do one of my famous air charts. This is what the change in inventories looks like going back 30 years. It looks like this [draws straight horizontal line in the air]. Then last quarter it looks like this [draws straight vertical line]. We will never have a swing in inventories like we had in the fourth quarter.”
But Liesman was encouraged by the report’s information about consumer spending and business spending on capital goods.
Pearlstein however remained concerned about a “double-dip recession.”
Reuters money and politics columnist James Pethokoukis compiled a number of reactions to the GDP growth on his Twitter feed and his Reuter’s blog.
On Twitter Pethokoukis quoted Action Economics saying, “Report has symptoms of the same problems that plagued the overly-optimistic advance Q3 GDP// (3.5% downgraded to 2.2%.)”
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