"LIKE SLUGGISH WATERS THROUGH A MARSH..."

"LIKE SLUGGISH WATERS THROUGH A MARSH..." The poet Sir Walter Scott wasn't talking about the economic recovery, but his words paint a pretty vivid picture...and after last week's economic reports, perhaps a pretty accurate one on the state of the recovery.
Last week's Gross Domestic Product (GDP) report showed that the economy grew 5.9% in the 4th quarter of 2009, which was in line with expectations and the best GDP reading in more than 6 years - which on the surface, sounds like a great number. However, the gains came from rebuilding of inventory and very modest business spending - not from consumer spending.  The biggest component of GDP is consumer spending and the revised number on that front came in lower than expected, and far worse than the 3rd Quarter of 2009, when the government's Cash for Clunkers program temporarily boosted sales. 
On the housing front, Existing Home Sales for January were reported at 5.05 Million units, which was less than expectation of 5.44 Million.  As you can see from the chart below, Existing Home Sales have now declined for two consecutive months. New Home Sales for January were also reported below expectations last week. 
Odds are that inclement weather affected the housing market negatively in January - since people are less likely to go house hunting in the midst of snowstorms and freezing temperatures. But in any case, last week's data demonstrated that the housing market remains a bit lethargic.