You are exactly right... Re-stocking inventories drove 3% of the 5.7% growth. Retail sales another 100+ basis points. But, honestly, this should have been expected as the economy is coming off such a low base. I’ve been posting on here for a year that Q4 and Q1 GDP numbers were going to be strong. The issue, both economically and politically, is what happens in the second half of 2010 and 2011. Art Laffer has stated that he thinks that 2010 will be strong as everyone is anticipating higher taxes next year and will get there spending in now and cut it back next year to pay for the increased tax bill.
There is extreme danger in thinking that the economy won’t recover between now and 2012 and Obamarx is a sure 1 termer. The economy will almost certainly be in the 3rd year of recovery and there will be job growth (barring a catastrophic terrorist attack or massive economic miscues like raising taxes on everyone or China collapsing). The US economy is just too strong and resilient...and it will have NOTHING to do with Obamarx but he will get the credit. The president always does.
We shall see... you measure by the past... we are in uncharted waters... and they be monsters in these here waters.
LLS
And we should NB that the reduction in imports also added to the GDP.
As for job growth: I believe it will be tepid, at best. As has been seen in other recoveries from financial sector melt-downs, employment takes a long time to recover - six to seven years. I don’t believe we’ll see anything approaching 5 to 6% unemployment anytime before, oh, 2014 to 2015.
We’re nowhere near done writing down bad debt in this economy. Nowhere close.
The biggest reason I could see Obama hanging on more than one term is because the GOP has no one who has a clear-cut plan on how to reinvigorate the US economy, increase employment and increase wage growth. Right now, the GOP has it easy as the opposition party - they can just say ‘no.’