Final 4Q09 GDP +5.6%, But Consumer Spending Down. 1Q10 GDP Due April 30. View GDP Last 9 Quarters.

The third of three 4Q09 GDP readings came in today at +5.6%, which is lower than the previous reading of +5.9%, but still a strong economic growth number, and it’s now official that we’ve had two consecutive quarters of GDP growth—following four consecutive quarters of economic contraction (a 60yr record for consecutive GDP declines). This strong GDP reading was due largely to acceleration in private inventory investment, a deceleration in imports, and an upturn in nonresidential fixed investment that were partly offset by decelerations in federal government spending and in Personal Consumption Expenditures (which we’ll hear more about Monday). Real GDP in 2009 declined -2.4% versus a +0.4% gain in 2008.

Stocks are up on GDP an improving sentiment over Greece’s debt problems and bonds (including Treasuries and Mortgages) are also better by about 20 basis points. If this bond performance holds, it might help offset some of the selloff of the past two days which has pushed rates up about .2% on the week. As for GDP, consumer Spending will need to be higher before any sustained GDP growth can occur, and the data don’t suggest we’re there yet. All GDP figures are ‘real’ or inflation-adjusted, and the next GDP reading for 1Q10 will come on April 30. The last nine quarters of GDP are at the bottom of this post, and you can also visit our Data section to see historical GDP figures, graphs and download data.

As of November 25, 2008, -0.5% GDP was the largest quarterly decline since the tail end of the last recession in 2001. Six days after that release (and about one year back from today), the NBER declared a recession had been in effect since December 2007 and also countered the popular definition of recession as two consecutive quarters of negative GDP growth, saying that they evaluate many factors in addition to GDP. This falls well in line with the beginning of the credit crunch in August 2007 and the multi-layered factors that have led to the recession that’s lasted two years. Recession beginnings and endings are always officially called after the fact, and while 3Q and 4Q GDP certainly suggest a recovery, 10% unemployment suggests otherwise. Here is the press release for today’s figures.

4Q2007: -0.2% (final)
1Q2008: +0.9% (final)
2Q2008: +2.8% (final)
3Q2008: -0.5% (final)
4Q2008: -6.3 (final)
1Q2009: -6.4% (final)
2Q2009: -0.7% (final)
3Q2009: +2.2% (final)
4Q2009: +5.6 (final)