The government said profits grew for corporate earnings in the fourth quarter as the economy bounded from a deep recession.
The Commerce Department stated on Friday that the pretax profits rose 8% to a seasonally adjusted $1.5 trillion annual rate in the fourth quarter from the third quarter.
GDP grew at a 5.6% inflation-adjusted annual rate. The change in inflation was due to the construction spending decrease. Economists are expecting more modest growth for the first quarter, with most estimates around 2.8%.
While conditions continue to improve for companies, consumers are still not yet confident in the recovery. An index of consumer sentiment remained flat at 73.6 in March from the prior month.
Steven WOod, an Insight Economics LLC analyst reflected these thoughts about the consumer confidence level, ""It is unlikely that sentiment will improve to truly optimistic levels until robust job creation returns and home prices stabilize."
Very interesting article Dave, and also relevant to todays class (the one you did not attend). This article points out that GDP is on the rise, but consumption is still lagging, contrary to what the graph in class said today about the two factors moving together. Perhaps this is too short term to make a comparison or this recession left US citizens with higher concern for reckless spending. I wonder how high investment has risen in this period?
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