The MSM headlines scream good news about economic growth during the final quarter of 2009: Economy Grows at 5.7 Pct Pace, Fastest Since 2003. Wow, that’s great! Third quarter growth was only 2.2%. This economy must really be heating up! The White House crowed that this was “the most positive news to date on the economy.”

Oops . . . wait a minute. Let’s take a closer look. Consumer spending was 1.44%, down from 2.8% in the previous quarter. After all:

Consumer spending, which normally accounts for about 70 percent of U.S. economic activity, has been held back by the worst labor market in a quarter century.

Oh yeah, that troublesome “jobless recovery”. People without jobs make for a bad economy, “recovery” be damned. Let’s check ShadowStats for the latest numbers:

The red line in the graph above is what the government (and MSM) tells us the unemployment rate is. The gray line is what the government uses in internal reporting, or when they are trying to be honest. It includes workers who recently gave up looking for work (or “short-term discouraged workers). The blue line includes people who are willing to work, capable of work, want to work, but got so tired of banging their head on the concrete wall of rejection that they gave up a while ago, the “long-term discouraged workers”. According to ShadowStats, this number was “defined out of official existence in 1994″. I guess Slick Willie couldn’t tell the truth either.

On top of everything else, new home construction went into free-fall, dropping from 18.9% in the third quarter to only 5.7%. So much for that housing bubble repairing itself, as “recent data have hinted at some weakness starting to creep in.” Weakness, yeah. That comes from a major artery of our economic health being slit open.

But at least business investment was up 2.9 % after falling 5.9% the previous quarter. That’s got to be good, right?

The two straight quarters of growth followed a record four quarters of decline. Still, the expansion in the fourth quarter was fueled by companies refilling depleted stockpiles, a trend that will eventually fade. . . .

Must be why the NASDAQ dropped 1.45% and my personal investing portfolio (which almost always way outperforms the NASDAQ) dropped 1.34% last Friday. Yeah, the day that this “good news” came out.

How bad is it? Even liberal MSM mouthpiece ABC News is starting to talk honestly. Over the weekend they changed the name of the above referenced article from Economy Grows at 5.7 Pct Pace, Fastest Since 2003 to a much more ominous (and truthful) 4th Quarter’s Fast Economic Pace Likely to Wane. Thier evidence is history itself:

Unlike past rebounds driven by the spending of ordinary shoppers, this one appears to hinge on spending by businesses, foreigners and — until it runs out — government stimulus.

History suggests this isn’t the recipe for a strong recovery. In the early 1980s, businesses led a recovery from recession. Their inventory building accounted for 74 percent of growth in the first.

But then the economy contracted. A drop in inventories was a key reason why. The economy fell into a second, more severe recession in 1981 and 1982. The unemployment rate hit 10.8 percent, the post-World War II high.

Is another “double-dip” recession likely now?

Of course, ABC tries to pooh-pooh the idea of a double-dip recession. Me? I’m watching my pennies because I can’t afford the risk.

Technorati Tags: Destruction of the American Economy, Rising Unemployment in America, Stimulus and Other Bad Ideas, Government Meddling in the Free Market, Barack Hussein Obama the Dangerous Choice