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Merchants finally restock, boosting GDP
A Home Depot employee checks a shelf at a store in Brooklyn, New York.
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KAI RYSSDAL: Take an economy that's been stuck as long as ours has and almost any increase in growth is a good thing -- 5.7 percent for the last quarter of 2009 is flat-out amazing. The best in six years. But... well... here's John Dimsdale.
John Dimsdale: The Commerce Department says the biggest chunk of last quarter's growth came from inventory replacement. Starting in 2008, retailers and wholesalers were too skittish about the economy to replenish their slowly emptying shelves. But by last summer, stockpiles had fallen enough to generate some replacement orders, so factories geared up.
David Malpass with Encima Global says shelves are full again, but customers aren't buying yet.
David Malpass: People are worried about their jobs, holding back on their purchases. And so we won't be able to keep growing at a 5 percent rate, because the goods and services would just pile up.
There is one part of last quarter's growth that looks more sustainable.
David Huether: We're seeing a real surge in exports.
David Huether, chief economist for the National Association of Manufacturers, says exports grew by 28 percent, thanks to orders from Europe and Asia.
Huether: And the global economy is picking up. The dollar is competitive, about 10 percent below its long term average, and we're seeing the benefits of that.
Huether says that's the strongest export growth in 30 years. Still, exports alone aren't enough to improve the job picture any time soon.
Josh Bivens: The jobs hole is so deep we need about 10.5 million jobs just to get back to the pre-recession unemployment level.
Josh Bivens is with the Economic Policy Institute.
Bivens: It would take about four years of growth at 5.7 percent to get there.
Bivens says the economy won't grow anywhere close to that without more government stimulus.
In Washington, I'm John Dimsdale for Marketplace.
Saying we need more government stimulus to get us more employment is foolishness. Government spending has been conclusively shown to be at best less effective than the alternative. With this administration, it would be disastrously counter-productive. To get the economy going again, we need less government, not more. As I keep saying, Reagan was right: "Government is not the solution to our problems. Government is our problem."
