The US Commerce Department announced today that the US economy grew at an annualized rate of 5.6 percent during the fourth quarter of 2009. Corporate profits also increased in the final three months of the year. Analysts suggest that should this trend continue, we could see meaningful employment gains, but not until later this year.
Ã¢â‚¬Å“So far, the income related to the surge in GDP is going to profits, but the next step is likely to be a clear pickup in labor income as well,Ã¢â‚¬Â James OÃ¢â‚¬â„¢Sullivan, chief economist at MF Global Ltd. in New York, said before the report. Ã¢â‚¬Å“We do expect to see a clear pickup in job growth, which leads to increases in spending.Ã¢â‚¬Â
It is important to not however, that the actual results still fell short of the estimate of 5.9 percent. Federal Reserve Chairman Ben Bernanke made the point in his testimony yesterday before the House Financial Services Committee, that despite the recent growth, the economy is still under-performing and the employment outlook remains “very weak”.
Ã¢â‚¬Å“The economy continues to require the support of accommodative monetary policies,Ã¢â‚¬Â Bernanke said in yesterday’s testimony.
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