As we've been predicting for quite some time, GDP for Q4 was anything but lackluster. The gross domestic product rose at a 5.7% annual pace, the Commerce Department reported Friday, up from a 2.2% rise in the third quarter. The growth rate was the fastest pace reported in six years.
Another regional manufacturing report out from Chicago-land showed additional expansion in January. Their index rose to a healthy 61.5% in January from 58.7% in December. Any readings above 50% indicate business expansion and it is clear now in that region that expansion continues to accelerate.
And in further good news for the retail sector, the University of Michigan consumer sentiment survey beat expectations moving higher to a reading of 74.4 for January. The reading is now at a two-year high and a full point and one half better than economists' consensus expectations.
Also on Friday, President Obama proposed a $33 billion package of tax credits for small businesses as part of his plan to boost job creation.
Obama wants to give small businesses a $5,000 tax credit for each net new employee they hire this year and companies that reduce their payrolls at any point this year would not be eligible for the any of the hiring credits and or wage bonuses.
Further, earnings reports for Q4 and positive business expectations for Q1 continued to roll in this week during company earnings releases and conference calls.
On Friday, Honeywell (HON) said it earned $698 million, or 91 cents per share, beating expections by a penny per share. The firm reaffirmed a full year 2010 profit forecast of between $2.20 and $2.40 per share on revenues of $31.3 billion to $32.2 billion. Their CEO, Dave Cote said, "we are encouraged by the improving order trends and stabilization in many of our end markets."
Microsoft also beat by a penny this week. Late Thursday, Microsoft said it earned $6.66 billion, or 74 cents per share, up from $4.17 billion, or 47 cents a share, in the same period a year earlier. Their revenues rose 14% to $19.02 billion.
But perhaps the strongest of company news came from Apple Computer (APPL) on Wednesday. The firm reported earnings that surged well past Wall Street estimates.
The iMaker said it earned $290 million, or 34 cents per share (a dime above estimates), on sales of $3.24 billion (250M above estimates) in the three months ended March 26. In the same quarter a year ago, Apple earned only $46 million, or 6 cents per share, on revenue of $1.91 billion.
As everyone now knows Apple released the iPad later in the week, but speaking specifically to earnings on Wednesday, CEO Steve Jobs noted, "Apple is firing on all cylinders." The comments were indeed in line with our observations of PC shipments that rocketed higher in Q4.