Calculated Risk, Paul Krugman, and the Republicans are trying to find bad news in the 5.7 percent increase in the size of the economy last quarter. Certainly much of the growth is in restocking, but that’s restocking that did not take place a year ago, and restocking is good because it means that businesses are anticipating selling what they’re restocking. And the restocking only applies to 3.4 percent, which means there was 2.3 percent growth beyond that. And yes, much of it is the result of the stimulus and cash for clunkers programs, and yes, the rate of increase will probably drop this quarter. But there’s only so much bad news you can find in a 5.7 increase following two years of recession. Things are looking up.
If only Obama wasn’t caving to Republican ideology and planning to actually take money out of the economy with ill-advised discretionary spending freezes, I’d be very optimistic about an end to the recession this year.
Addendum: It looks like the expansion may have been global.