Up Up and Away

US GDP numbers for the fourth quarter were just revised upwards to 3.8% from 3.1%. Growth for the year was 4.4%, just a tad below the 1999 growth of 4.5%. The source of the revision were stronger exports which means that things are working the way they are supposed to and the way they always have - the weak USD is making exports more competitive and over time this will work to reduce the trade deficit.

Business investment is increasing and consumer spending is keeping pace. The economy is no longer resting solely on the shoulders of the consumer.

Inflation still remains benign with Greenspan's favorite metric of personal spending minus food and energy running at an annual rate of 1.9%.

Things are as good as they have been in 30 years and yet there is no widespread jubilation. This is very good and makes it more likely that the good times will be sustainable.

Which would you rather be - Japan and Germany with large trade surpluses and no growth or the US with large deficit and tremendous growth?

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