I started a thread a while ago that recession began in July---and was ridiculed.....DATA folks----follow the data and ignore all else.
DATA was clear---economy stared HUGE slowdown over summer....no one listened....the main credit goes to Hussman and ECRI who called this BEFORE anyone saw it.
Consumer and business spending was up to offset gubmnt spending/ payoffs but look for gubmnt spending numbers to be revised to push the GDP into the green.
We're obviously not spending enough money to get things kick started. Once bernanke doubles down, everything will be fine. Always remember these immortal words...
Bernake printing money. Wall street apparently has the same outlook as the general public, just charge it, we will take quick profits, debt be damned. Let the public of tomorrow pay the price. We want ours today.
meanwhile the Euro is up on the dollar and people will soon begin to blame big oil for the price of oil going up (approachign $100) even though it is primarily due to the declining dollar.
Government spending makes up 25% of GDP right now, and any cuts in Gov spending will hurt the economy...
Can't have it both ways folks
There is a lack of demand that isn't going away anytime soon...Americans know the "good old days" before intrenched globalism aren't coming back, that the free ride on the nations CC and housing bubble are gone, a lot of mistrust with Gov and financial institutions after the crash
Some protectionist measures may be necessary to bring back industry and jobs
The big categories dragging down growth: falling federal government spending, exports, and inventories. None of that is good news. The 4th quarter decline in government spending was driven by plunging defense spending, and with the sequester coming, we may see a repeat later this year. Exports were presumably depressed by lackluster growth around the world, which we can expect to continue, given events in Europe. And it's never good to see downward inventory trends when the economy is contracting; it tends to be a sign that companies are adjusting to unexpectedly falling demand for their goods.
The good news, such as it is, is that personal consumption spending and investment were humming along, growing 2.2% and 8.4%, respectively. The boost in personal spending was driven mostly by durable goods, which probably means that people are reaching the limits of hoarding--they've pushed the old car along an extra five years, put up with the oven that doesn't always work, and gone without a dishwasher, but they're now having to replace some stuff.
In theory, that can touch off recovery, as production eventually ramps back up, and rising confidence ripples through the economy. (Paul Krugman had a great explanation of this a while back, but I can't find it. Curse your prolific output, Professor Krugman!) But in the context of an otherwise lackluster GDP report, this is worrying in the short term: people aren't buying because they have more confidence in their future, but because they feel they have absolutely no choice. We don't want to be in a place where people reluctantly pry open the piggy bank only because the old clunker is finally lying smoking in the driveway; we want an economy where people feel that it is safe to buy a new car, because they are likely to have a job in three years.
Fourth Quarter GDP
Linear Mode
