Cross Timbers Business Report, Volume 23, Number 2, Winter 2010 Page: 1

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Cross Timbers Business Report
Published by the College of Business Administration, Tarleton State University
Articles by Members of Delta Mu Delta, William L. Beaty, Faculty Editor

Volume 23, No.2

Winter 2010

Output Posts Another Rise
By DeAnna L. Robertson

Real gross domestic product (GDP), the inflation-
adjusted value of all final goods and services produced
in the economy continued to rise in the fourth quarter of
2009, climbing at a 5.6 percent annual rate following
the third quarter's 2.2 percent rise according to a recent
Changes in Real GDP
Annual Percentage Rates
8
6
2.2
2
-0.7 -0.7
-2
-2.7
-4
-6 -5.5
-6.6
-8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009
Source: Bureau of Economic Analysis, U. S. Department of Commerce
report from the U.S. Department of Commerce. This
report supports many economists' assertions that the
recession that began in December 2007 has reached its
end. However, according to The Wall Street Journal,
2009 will be remembered as a recessionary year, as
GDP fell by 2.4 percent compared to the year before.

Consumer spending rose by 2.0 percent in the
fourth quarter. Despite early doubts about the strength
of early holiday spending, final sales postings revealed
modest gains.
The housing sector rose for the second quarter in a
row. Residential fixed investment saw a rise of 5.7
percent during the fourth quarter which followed an
18.9 percent jump in the third quarter.
Spending by the federal government rose again in
the fourth quarter. This component rose 0.1 percent,
which is significantly lower than the 8.0 percent growth
recorded in the previous period. State and local gov-
ernment spending fell by 0.3 percent.
Exports, which increase domestic output, advanced
by 18.1 percent in the fourth quarter, while imports,
which reduce output increased by 10.5 percent.
The Department of Commerce publishes GDP data
on a quarterly basis. The preliminary estimate reported
here will be subject to two revisions before it appears in
its final form.
DeAnna L. Robertson is president of Delta Mu Del-
ta and will be graduating in May with a Bachelor of
Business Administration degree in Marketing at Tarle-
ton State University.

Inflationary Pressures Remain in Check
By William L. Beaty

Following a wild roller-coaster ride of inflation and
deflation that occurred in 2008, price changes moved
within relatively narrow boundaries last year. In 2009,
prices actually declined slightly, which marks the first
full-year deflation report since 1955.
Annualized monthly changes in the consumer price
index, the country's most quoted price-change measure,
ranged from a negative 1.7 percent in March of last
year to a positive 9.0 percent in June. These patterns
contrast sharply to the negative 19.9 to positive 11.2
percent range recorded in 2008. According to the Bu-
reau of Labor Statistics, 2009's average price level was
0.4 percent below the figure posted the year before. By

contrast, the overall inflation rate for 2008 was 3.8 per-
cent. Economists cite the weak global economy, which
reduced producers' abilities to raise prices as the cause
of last year's decrease.
Consumer price index changes are reported
monthly and are closely followed by economists as an
inflation indicator. Cost of living adjustments for many
workers and for Social Security recipients are also
based on this index.
William L. Beaty is an assistant professor of eco-
nomics at Tarleton State University

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Tarleton State University. College of Business Administration. Cross Timbers Business Report, Volume 23, Number 2, Winter 2010, periodical, Winter 2010; Stephenville, Texas. (https://texashistory.unt.edu/ark:/67531/metapth284682/m1/1/ocr/: accessed March 28, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Tarleton State University.

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