Bull Trip?!: GDP Report Q4 2009 (Advance)

Today, the Bureau of Economic Analysis (BEA) released their first installment of the Q4 2009 GDP report showing that the economy expanded significantly with GDP increasing at an annual rate of 5.7% from Q3.

It's important to recognize that the majority of this growth is the result of inventory restocking, growth in fixed non-residential equipment and software investment as well as a notable slowdown in imports.

As with last quarter, estimates of fixed investment in both residential and non-residential appear too optimistic in the release which, along with the change in inventories, saw nearly a 40% increase in overall gross private domestic investment.

Residential fixed investment saw an increase of 5.7% at an annual rate but likely still has further downward revisions to come in benchmark releases.

Non-residential fixed investment saw an increase of 2.9% at an annual rate but again, will likely be revised to show a steeper contraction in future revisions.