Details On 4% Growth Rate In Spring Quarter

The good news is the 4% growth rate was higher than most forecasts.  The details in this article indicate that the economy is still puttering along.  Inventories increased 1.66% and accounted for much of the gain in GDP.  Its better when the gains come from final sales rather than inventory.  The average real annual growth rate excluding inventories has been around 2.4% since the end of the official recession.  During a typical business cycle recovery the growth rate is usually much faster.  We have not made much progress in reducing the output gap.  The economy not growing fast enough to reduce the gap between potential GDP and actual GDP.  It also means that output could expand without creating price inflation.