Pleasantly Surprised by the Q4 GDP Miss

| About: SPAR Group, (SGRP)

GDP grew at 3.2% annual rate, we learned Friday, falling short of the expected 3.5%. Strong consumer spending in the last three months of 2010 was based on the most successful holiday spending season in five years. Consumer spending is growing at the fastest rate since 2007, the US is doing well in trade due to a weaker dollar, and the stock market is inflating.

There are some headwinds to be sure – gas prices, unemployment not fading, and the east coast snow dampening current retail ales. The biggest ding in the GDP was the only thing holding it up some time back – government spending. State and local agencies have cut back big time, as the storm in municipal bonds looms. So that was probably the .3% that economists were expecting.

If you do think GDP will continue its march upward, you can find stocks highly correlated to GDP growth. One such stock is Spar Group (NASDAQ:SGRP), which is an in-store merchandising company, and is benefitting from the kick up in retail sales.

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