BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

Gdp Growth Low And Falling

Market Movers

by Felix Salmon
Main
The Credit Crunch and US Politics   Department of Improbable Statistics, Beer Edition

Recent Blog Posts

Links

Jan 30 2008 12:00am EDT

GDP Growth: Low, and Falling

We officially didn't enter a recession in 2007: GDP growth for the fourth quarter was positive, albeit very low at 0.6%. The main engine of growth is still consumer spending, rather than exports, but it's slowing, contributing 1.4 percentage points to GDP growth, balancing out housing, which subtracted 1.2 percentage points. The best news, I think, comes on the spending and inventories front, with business spending rising 7.5%.

In the end, and with hindsight, I think the US can count itself lucky to get away with 2.2% GDP growth for 2007. If we manage anything like that for 2008, it'll be a miracle. David Leonhardt today calculates what this all means for Ben Bernanke:

If the real estate slump does lead to a nasty recession -- or even just 18 months of slow growth and rising unemployment -- it may not matter what Mr. Bernanke does. By reappointing him, a new administration would be tying itself to the Bush administration and the housing bust.

Keeping one's job is a big motivating factor for anybody. So expect a 50bp cut later this afternoon.

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More