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“We never thought it would be at this level so early,” said Millan Mulraine, an economics strategist at TD Securities in Toronto. “It’s certainly an indication that the economy picked up a lot of steam in the last quarter.”

The challenge now is to repair all the damage that’s been caused done by the recession. Mr. Bivens pointed out that even three years of sustained 5.7-per-cent growth wouldn’t replenish the 7.2-million U.S. jobs that have vanished since the recession began in December, 2007.

And economists cautioned that the main driver of growth in the final three months of 2009 won’t sustain the same pace of growth this year.

The main reason for the U.S. fourth-quarter surge is that businesses have begun the process of restocking badly depleted inventories after the longest and deepest recession since the Second World War. Gains in consumer spending, exports, spending on homes and business investment also helped push growth higher.

If you strip out the impact of restocking inventories, which accounted for more than half of the quarter’s gains, the U.S. economy was growing at a much more sluggish 2.2-per-cent rate.

Indeed, most economists are expecting tamer U.S. GDP growth of roughly 3 per cent in the first three months of this year.

And most disturbing, according to Wells Fargo Securities chief economist John Silvia, businesses aren’t yet feeling confident enough about the future to resume hiring.

Taking advantage of record low interest rates, companies are choosing to invest in productivity enhancing tools, rather than people, he said. Mr. Silvia pointed to an impressive 13.3-per-cent increase in spending on equipment and software in the third quarter.

“Capital appears to be substituted for labour as many firms strive for productivity and cost control,” he explained.

Mr. Silvia also suggested that companies may be delaying hiring until the uncertainty over health care reform is resolved, worried the cost of providing benefits to new hires may soon soar.

There was also some suspicion among economists that the 5.7-per-cent headline number, which will be revised at least twice in coming months as more precise data becomes available, may turn out to be lower.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said he suspects further revisions will show that growth was not as strong. For example, he cast some doubt on the surge in equipment and software investment, which he said came out of nowhere.

“A downward revision is likely but for now it is the number,” Mr. Shepherdson said.

Several factors continue to weigh on the economy. And it’s not just the weak job market.

The housing market remains in a deep slump, with prices still sagging in key markets. That’s causing a continuing rise in foreclosures, while sapping homeowners’ wealth.

And the banking sector continues to be a drag on growth. Banks are still withdrawing credit from the economy, according to the Federal Reserve, making loans harder to get for businesses and individuals, in spite of rock-bottom interest rates.

Economists fear that an inevitable return to higher interest rates could further destabilize banks, and the housing market.

The U.S. economy’s fourth-quarter GDP gain may only do so much to improve the climate for Canadian manufacturing exports because it’s heavily weighted toward inventory adjustments, as opposed to spending by America’s shell-shocked consumers.

“We’re getting growth in the wrong parts of the U.S. economy, particularly the fact the bulk of that growth came from trimming inventories at a reduced rate,” said Stewart Hall, an economist with HSBC Securities in Toronto.

Mr. Hall also pointed to the fact that international trade added 0.5 percentage points to U.S. growth, highlighting that a weak dollar and stimulus-driven demand in Asia have helped the world’s biggest economy become a net exporter.

“We need them to be importing more,” Mr. Hall said.