The U.S. economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, the quickest in more than six years, as businesses made less-aggressive cuts to inventories and stepped up spending.
The Commerce Department said on Friday its first estimate put fourth-quarter gross domestic product growth at its fastest pace since the third quarter of 2003. The economy expanded at a 2.2 percent annual rate in the third quarter.
Now, if you measure recessions in the traditional way, we are officially out of the recession. Traditionally, once you have two consecutive quarters of growth following a recession the recession is over.
This number is excellent. While there will be some conservatives that will talk this number down, the markets are not. All three are up nearly 1% in pre market trading. With markets now in a near two week tail spin, that will be a welcome reversal.
Meanwhile, the ten year U.S. Treasury bond is up slightly. It's currently at 3.67% and up three basis points. The yield spread between the two and ten year has tightened slightly over the week and it's at 2.76%. The three month t bill has gotten a bit worse to .071%. Crude oil is up this morning to $74.64 a barrel. Gold is up just slightly to $1088 an ounce.
We had near mirror images in Europe and the Far East. Markets are currently up across the board and the exact opposite has occurred in the Far East. The Hang Seng in China was down 1.15%, the NIKKEI in Japan was down 2.08%, and the Straits Time Index in Singapore was down .45%. In Europe, the FTSE in London is currently up 1.09%, the DAX in Germany is up 1.35%, and the Spanish Index is up 1.16%.
The Dollar is up on the GDP news. It's up .29% against the Euro, up .49% against the British Pound and up 1.01% against the Japanese Yen. Finally, Toyota says it plans on recalling some of its European models extending this growing problem. The news that Ben Bernanke was renominated was supposed to dominate the market today but the GDP news will put all else on the back burner.