Do you want the good news or the bad news first? We had a little bit of both yesterday regarding the country's economic growth. Let's start with the good news: The Commerce Department revised upward its initial estimate of GDP growth in the fourth quarter of 2011, moving the figure up from 2.8 percent to 3 percent. That shows an even stronger upward movement from the 1.8 percent growth we had in the third quarter.
But the question is, how long is that going to last? The bad news is that Federal Reserve chairman Ben Bernanke threw a little bit of cold water on the numbers yesterday in his semiannual report on the economy. The Fed's forecast calls for GDP growth of 2.2 percent to 2.7 percent for 2012. That's somewhat down from the fourth quarter of '11.
Bernanke cited flat incomes as part of the reason for his pessimism, meaning the Fed may not have processed another bit of revision from yesterday: Commerce also revised upward its estimate of income growth from both the third and fourth quarters of 2011. Incomes are now believed to have grown a relatively robust 1.4 percent in the fourth quarter, and rose 0.7 percent in the third - after the initial estimate had pegged it at a 1.9 percent drop. That's a huge turnaround, and is probably a reason to believe the good news rather than the bad news.
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