Last week featured President Obama’s State of the Union address, in which he promised some job-creation plans and some tax schemes to encourage small businesses to hire. The President delivered an address on how he plans to cut the deficit in a speech on January 30.
The Fed released a statement following the FOMC meeting on January 26th and 27th, suggesting that “inflation is likely to be subdued for some time.” Fed Chairman won Senate confirmation for a second term on January 28. And perhaps the favorite ex-Fed chairman of the moment, Paul Volcker, delivered his prescription for reforming the U.S. banking sector in an OpEd in The New York Times on January 31. The Senate Banking, Housing, and Urban Affairs committee holds hearings February 4 “to examine the implications of the “Volcker Rules” for financial stability.
The Bureau of Economic Analysis released the first estimate of fourth-quarter GDP on how the economy performed in the fourth quarter of 2009: GDP grew at a 5.7% annual clip in Q4, following a 2.2% increase in the third quarter, which was the greatest-one quarter growth rate since the third quarter of 2003. Naysayers questioned the sustainability of such rapid growth, especially considering the end of certain stimulus programs, and pointed out the influence of inventory writedowns for much of the improvement, but the Obama Administration countered by saying this was the time to approve a new round of job-creation stimulus plans, including one that would give some small businesses a $5,000 tax credit for every new hire, and a wage bonus for expanding their payroll, retroactive to January 1, 2010.. That would be good, since so far the recovery remains a jobless one. Meanwhile, existing home sales actually rose 5% in 2009 as prices fell.