The economy has grown at a rate of 3.5 percent for the 4th quarter in 2006, higher than economists projected. Many have said that the slowdown in construction would cause a significant recession in the country by this time. However,  the economic engine that is the United States has taken the real estate slowdown and moved right past it.

Housing investment slowed 4.2 percent in 2006 but that was not enough to slow the economy into recession. Those that are counting on a recession to put the housing industry into a full blown crisis may be a bit disappointed today. When the speculative bubble is absorbed it looks like the housing industry will be in pretty good shape moving forward.

The fresh snapshot of business activity, released by the Commerce Department Wednesday, underscored the resilience of the economy; it has managed to keep on moving despite the ill effects of the residential real-estate bust.The economy’s performance in the October-to-December quarter, which followed two quarters of rather listless activity, exceeded analysts’ forecasts for a 3 percent growth rate.

The economy opened 2006 on a strong note, growing at a 5.6 percent pace, the fastest spurt in 2 1/2 years. But it lost steam during the spring and late summer. It grew at a 2.6 percent pace in the second quarter and then a weaker 2 percent pace in the third quarter. The fourth-quarter’s rebound ended the year on a positive note.

For all of 2006, the gross domestic product (GDP) increased by 3.4 percent. That was an improvement from a 3.2 percent showing in 2005 and the strongest showing in two years. That’s even more impressive considering the economy was hit by the housing slump. Investment in home building for all of last year was slashed by 4.2 percent, the most in 15 years.

GDP measures the value of all goods and services produced within the United States and is the best barometer of the country’s economic standing. via Kiplinger.com

Related posts:

1. Why We Might See Another Housing Slowdown if FHA Loans Blow Up
2. Third Quarter Existing Homes Sales Increase 11.4 Percent, Prices Drop 11.2 Percent
3. Housing Starts Down 54.2 Percent For April, 2009