192K jobs in Feb! But wait. Due to storms in Jan let’s avg out job growth in Jan and Feb. That gets us about 125K per month; not much better than in Q4 ’10. So we have positive job growth but no acceleration! This suggests GDP growth of 3% maybe 3.5%; half of what’s needed! Moreover, since Oct 700K persons have left the labor force and the participation rate is at a 27 year low!
Tag Archives: Q4
Sellin’ Outside the USA
S&P 500 sales did quite well in Q4 — up 7.7% and ahead of estimates by a country mile. But, from what I see most growth in sales is coming from outside the USA! Here, revenues are growing at barely a 3% annual rate. The pace is around 20% for foreign-derived sources. The question is what happens to these sales if foreign markets slow and more importantly what does this mean for all important job growth here at home?
More on Q4 GDP
Q3 saw a boost to GDP due to inventories so the Q4 reversal must be seen in that light. Monday’s personal income & spending report gave details on how ’10 ended. Real personal consumer expenditure (PCE) spending rose 0.4% MoM in Dec but real personal disposable income was up only up 0.1%. How? Because consumers reduced savings to 5.3% from 5.5%. Absent that PCE would have been 0.1% not 0.4%.
Consumption Driven GDP
While 3.2% GDP growth in Q4 is excellent it was driven entirely by consumption which makes up 70% of GDP. The other 30% of the economy fared poorly in Q4 essentially stagnating (a puny 0.2% annualized growth rate). So while the consumer enjoyed its fastest growth rate since Q1 ‘06, the rest of the economy posted its softest showing since Q1 ‘09. Comm const, inventories and capital spending all hurt Q4 GDP.