GEE DP

Inventories Boost GDP
Last Update: 30-Jan-09 08:48 ET briefing.com
I
nventories rose slightly in the fourth quarter. That compared to a large drop in the third quarter, so the contribution to GDP from inventories was a much stronger-than-expected 1.3%.

That led to a smaller-than-expected drop in overall GDP of 3.8%, compared to an expected drop of about 5.5%.


The other components were not as upbeat.
Personal consumption expenditures (consumer spending) dropped at a 3.5% annual rate and sliced 2.5% off GDP.

Nonresidential investment plunged at a 19% annual rate and residential investment (housing) dropped at a 28% annual rate.

Government spending did manage a modest increase.
A
lso a bit of a surprise, net exports added 0.1% to GDP rather than taking a bit off.

Overall, the trends in the key components -- business investment, consumer spending, and housing -- remain poor.

The inventory boost is not likely to continue into the first quarter, and net exports could well turn negative. That sets the stage for a similar decline at a rate of 3% to 4% for first quarter real GDP.

The headline on this report is not as bad as feared, but the breakdown doesn't provide much encouragement.

*** Tennesee Airport reported a 33% DROP in AIR CARGO....worst on record since 911.
Recent report shows Japan's economy shrunk by 10%.

Forget the "LITTLE PEOPLE" if OBAMA panders to gov spending and handing out condoms....and NOT GIVING SMALL to MED size biz a hand...lookout below

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