Monday, January 23, 2012

Why GDP report won’t be sign of what’s in store

Faster fourth-quarter growth unlikely to be matched in first quarter

The economy probably grew at its fastest pace in a year and a half during the fourth quarter, a key U.S. report is expected to show, but the first three months of 2012 probably won’t be as strong.

Gross domestic product for the fourth quarter — the statistics that shows how fast the economy expanded — is the biggest report of the week. Other notable data include consumer confidence, new home sales and orders for durable goods.

The current MarketWatch forecast of economists predicts 3.0% growth in the fourth quarter, well above the third-quarter level of 1.8%. That would be the fastest pace of growth in a year and a half.

A higher fourth-quarter GDP, however, doesn’t mean the economy is ready to soar after several years of mediocre growth. Indeed, the MarketWatch forecast calls for growth to slow to 1.9% in the 2012 first quarter. Read more.....

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