Fourth Quarter Growth

FOURTH QUARTER GROWTH….Hmmm. Economic growth was an anemic 1.1% in the fourth quarter. It would have been even worse except that businesses were busily building up their inventories in the hopes that someone will buy all their stuff next quarter. Maybe.

No one seems to be very upset about today’s announcement, even though 1.1% is way below the consensus forecasts of 2.8%. It’s not entirely clear to me why. With oil still over $60 per barrel, the housing market starting to cool a bit, and household debt still at record levels, it’s hard to see just where the consumer demand is going to come from to get things back on track. Perhaps the blogosphere’s economists can weigh in to reassure me.