Fastest growth since 2003: The economy grew faster than expected at the end of last year, though the engine of that growth—companies replenishing stockpiles—is likely to weaken as consumers keep a lid on spending. The 5.7% annual growth rate in the fourth quarter was the fastest pace measured since 2003. The Commerce Department’s report today is the strongest evidence to date that the worst recession since the 1930s ended last year, though an academic panel that dates recessions has yet to declare it over. The two straight quarters of growth followed a record four quarters of decline. The report provided an upbeat finale to an otherwise dismal year: The nation’s economy contracted 2.4% in 2009, the largest annual decline since 1946 and the first since 1991.
Modest growth: Wages and benefits paid to U.S. workers posted a modest gain in the fourth quarter, ending a year in which recession-battered workers saw their compensation rise by the smallest amount on records going back more than a quarter century. The anemic gains have raised concerns about the durability of the economic recovery. The fear is that consumer spending could falter if households don’t experience income growth. The Labor Department said today that wages and benefits rose by 0.5% in the three months ending in December. For the entire year, wages and benefits were up 1.5%, the weakest showing on records that go back to 1982. The 1.5% increase in total compensation in 2009 is about half the 2.6% increase in 2008, and both years taken together represent the smallest gains for the government’s Employment Compensation Index.
