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By PAUL KRUGMAN
"When demand drops, inventories build up, then production drops sharply as businesses work off the overhang. Finally, there's an "inventory bounce" when the overhang is gone. But the bounce doesn't necessarily presage a true recovery — to get that, you need increased sales to final buyers."
"And more than half of that 5.8 percent growth was just inventory bounce. Final sales actually grew only 2.6 percent, slower than in the previous quarter. And even that growth rate may not be sustainable: home construction soared, partly because of unusually warm weather, but there are already signs that the housing market is cooling off. Meanwhile, business investment, weighed down by excess capacity and weak profits, actually declined. In short, there is nothing in the data to suggest that a great boom is imminent."
"Of course, it's still possible that the prophets of boom will be vindicated. But it's also still possible, and I'd say about equally likely, that the recovery will stall. Right now the best bet for the next few quarters is probably a "jobless recovery," in which G.D.P. grows but unemployment stays high. After all, the economy needs to grow at about 3.5 percent just to prevent the unemployment rate from rising — and the odds are at least even that growth will fall short of that mark."
3:09:04 PM Google It! 
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