Recovery Ends. Expansion Begins.
By: MarketMinder Jan 29, 2011
The US Bureau of Economic Analysis (BEA) released its first estimate of Q4 2010 GDP on Friday. The report showed accelerating growth—to 3.2% annualized real GDP growth in Q4, missing analysts' expectations of 3.5%. While some met the report with disappointment, there are also many strong points.
Of note and little mentioned, US real GDP eclipsed its pre-recession peak for the first time (nominal GDP already accomplished that feat), meaning the economic recovery is now over and expansion has officially begun. And headline GDP isn't the only metric that's expanding—personal spending and exports are both above prior highs
The acceleration from Q3 2010's 2.6% growth was largely driven by two contributors: Consumer spending and net exports. Consumer spending posted its largest quarterly increase (+4.4%) in four years, and net exports, a metric reducing GDP in Q2 and Q3 2010, reversed course and added to headline growth.