Everybody, including Obama in his State of Union speech, talked about the biggest "recovery" since 2003 because during the last quarter in 2009 real GDP grew by 5.7%, higher than expected. Time to start pouring champagne? Not so fast. Devil is in the details, of course.
According to the Chicago Federal Reserve National Activity Index which tracks 85 economic indicators lumped into four categories: production and income (P&I); employment, unemployment, and hours (EU&H); personal consumption and housing (C&H); and sales, orders, and inventories (SO&I). The graph below explains how these categories performed in the second half of 2009. courtesy of Mish's Global Economic Trend Analysis, the growth was more inventory replenishment than recovery across the board.
Here are the chart and the numbers:
the chart suggests a big rebound last summer, but right now economy has hit a wall.
The table with numbers are downright discouraging. 4th quarter shows no meaningful growth whatsoever in the 4 categories nor in the overall index CFNAI, the Chicago Fed National Activity Index:
Eventually we are going to get out of this recession nicely...but not just yet.