Economic Growth is "Dismal and Poor"

Mark Noonan

Hey, its not just me saying it:

New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth “very dismal and poor” because it relied on temporary factors.

Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.

“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “I think we are in trouble.”

Roubini said while the world’s largest economy won’t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges.

“It’s going to feel like a recession even if technically we’re not going to be in a recession,” he said.

Me: I think it will not just feel like a recession, but it will be one. My bet is that 3rd quarter GDP will show a contraction unless Obama and Co can find some other temporary things to put some lipstick on our economic pig. Might even contract in the 2nd quarter – but I’m betting the bogus stuff they’re feeding in to the GDP numbers will carry them at least until June.