Re: Obama Recovery: Q4 GDP goes negative
posted at 1/30/2013 12:02 PM EST
Decrease in defense spending plus increase in home bldg activity should have been a boon for GDP. Where is the Clinton peace dividend effect?
U.S. economy contracts for first time since recession
By Annalyn Kurtz @CNNMoney January 30, 2013: 10:33 AM ET
NEW YORK (CNNMoney)
Uncle Sam cut spending and businesses drew down inventories in the fourth quarter of 2012, causing the U.S. economy to contract for the first time in more than three years.
Obama's GDP headache
By GLENN THRUSH | Politco
1/30/13 11:32 AM EST
Today's news of a 0.1 percent shrink in the 4th Quarter Gross Domestic Product is ambiguous in terms of the economics -- the fall was largely due to a drop in government spending and some shuffling of private inventories.
Nonetheless, the politics are unambiguously terrible for Barack Obama. This was a White House humming along with its "Recovery Winter" storyline, and Wednesday's bad number forces them into a defensive crouch after an early 2013 spent on offense. The words "unexpected contraction of the GDP" are never music to a White House, especially a White House singing new tunes on immigration, guns, et al.
The facts, as my colleague Joseph Schatz points out: "[T]he 0.1 percent fourth-quarter GDP contraction announced by the Commerce Department drew mixed reactions from economists, with little talk of a “double dip” recession."
The Dow, at least in early trading, was taking it like a mosquito bite. It didn't hurt that ADP, which recently tightened its methodology, also reported a fairly robust addition of 192,000 private sector jobs added in the last month.
But the bad news for Obama was an interruption in the we're-finally-roaring-back narrative -- it was the worst GDP hit since the depths of the '09 near-depression -- and it gave an adrenal jolt to the a GOP messaging establishment left supine by the Mitt Romney mirage and recent soul-searchy infighting.