I really enjoyed the in depth breakdown of the sources of our Gross Domestic Product (also called Aggregate Expenditure) for Q4 2010. The number, which was reported before the weekend, was slightly below expectations, at 3.2% growth. But the good folks at Zacks provided a really great analysis. Take a look:
Where the Q4 Growth Came From - Zacks.com
In particular, the numbers on government investment and private investment told us that the private sector is starting to buy again even as government continues to taper off it's stimulus spending, a good sign that businesses anticipate more business. Most of the private investment came from building inventories, so businesses expect to sell.
Residential investment (specifically meaning the building of new housing units) was basically flat. That is good for now, as there is a lot of inventory out there across the country. But for New York, where there is generally a housing shortage, there isn't a lot of residential (or commercial) building going on. For now, that doesn't matter. If anything, it's keeping the market level. But if we experience a robust recovery (and 3.2% after a 1.7% in the previous quarter is a robust start), it could be a problem in 2-5 years. I'm not the only person saying that, either.