GDP unexpectedly shrinks, decline seen temporary

Comments (46)
udidwht wrote:

The most sure way to kick start the economy is to gain consumer confidence and get people spending. The best way to do this is to deregulate across the board from the federal on down to local. This country needs about 10-20 years of solid deregulation. we’ve become some over-regulated that it’s too costly to even start a small business these days for most people.

Jan 30, 2013 2:46am EST  --  Report as abuse
AZreb wrote:

“GDP….above 1 percent is pretty respectable….” – the new normal?

Jan 30, 2013 8:24am EST  --  Report as abuse
GA_Chris wrote:

@ udidwht…

I strongly disagree… the lack of regulation is costing US companies billions… be it from being decades behind technology wise compared to foreign companies, right down to the soaring cost of healthcare, the most expensive in the world, and one of the lowest qualities. Consumer confidence can only increase if consumers have money, and currently wages are depressed and most of the tax burden is on the middle class, depressing growth.

We need assured regulation, like we need assured taxes, and no more flip flopping. Businesses can invest in certainty, and the US tax, regulation and judicial environment is one of the most volatile in the world

Jan 30, 2013 9:18am EST  --  Report as abuse
Rhino1 wrote:

I am sure, the S&P500 will jump 2% today ;-)

Jan 30, 2013 9:21am EST  --  Report as abuse
byrond2 wrote:

The economy will only truly improve when the super wealthy are forced to spend their money in American in large quantities. The super wealthy have “sequestered” America’s money and locked it up, keeping it out of the economy and hence making out country artificially poor. They wish to see the US become like corrupt 3rd world countries where there are the masses of poor that are ruled over by the wealthy, and where democracy is a sham.

Jan 30, 2013 9:57am EST  --  Report as abuse
Crash866 wrote:

The economy unexpectedly contracted in the fourth quarter, suffering its first decline since the recession ended more than three years ago as businesses scaled back on restocking and government spending plunged.

Surprise everbody!!! NOT!!

Jan 30, 2013 9:57am EST  --  Report as abuse
Crash866 wrote:

GA_Chris
“most of the tax burden is on the middle class”
Spoken like a true misinformed liberal

Jan 30, 2013 9:59am EST  --  Report as abuse
Harry079 wrote:

“Economists polled by Reuters had expected output to increase at a 1.1 percent rate. None of the economists surveyed had predicted a contraction.”

Sounds like Rueters might need some new economists to poll.

Jan 30, 2013 10:04am EST  --  Report as abuse
jverner2 wrote:

The economists should have talked to the businessmen, who began saying last September that they were holding off on replenishing inventories and planning for expansion because of worries over the fiscal cliff.

Jan 30, 2013 10:10am EST  --  Report as abuse
SteveTX wrote:

Why is it that government spending is counted in GDP? Any funds the government possesses came from borrowing, taxing or inflating. The government produces nothing. Yet the statistics include the costs of administering the huge wealth transfer program that is the government. It includes the costs of the government’s militarism. When a bomb is dropped and the cost of replacement is added to the GDP, does the value of the old bomb get deducted?

Does anyone track GDP minus government spending?

Jan 30, 2013 10:12am EST  --  Report as abuse
ontoyous wrote:

So, once again the news pundits are at it! The economy hick-upped. All this, and on the heels of defense contractors pulling in a bit because of less governmental throw-ins. What you weren’t told is that nothing goes straight up — that would be too easy. Besides, the over paid writers would have nothing — to write about!

Jan 30, 2013 10:23am EST  --  Report as abuse
ontoyous wrote:

So, once again the news pundits are at it! The economy hick-upped. All this, and on the heels of defense contractors pulling in a bit because of less governmental throw-ins. What you weren’t told is that nothing goes straight up — that would be too easy. Besides, the over paid writers would have nothing — to write about!

Jan 30, 2013 10:23am EST  --  Report as abuse
Crash866 wrote:

SteveTX
It’s the new way of tracking GDP. If they have their all GDP will be related to govenrment speding eventually. The “you didn’t build that” theory will be applied across the board. That way entitlement spending can be applied as a positive to GDP.

Jan 30, 2013 10:37am EST  --  Report as abuse
Crash866 wrote:

byrond2
Spooky stuff!! I thought it was just us conservatives who were bat—- crazy with conspiracies!!

Jan 30, 2013 10:40am EST  --  Report as abuse
Crash866 wrote:

byrond2 wrote:
“The economy will only truly improve when the super wealthy are forced to spend their money in American in large quantities”

Make em feel you anger make em feel you pain…force them…

Jan 30, 2013 10:41am EST  --  Report as abuse
R_Holliday wrote:

government spending is NOT down.
morons

Jan 30, 2013 10:45am EST  --  Report as abuse
Crash866 wrote:

GA_Chris
“We need assured regulation, like we need assured taxes,”
Really…assured taxes
There are 2 things in life that American’s can’t avoid…death and taxes. Most American’s surely don’t need more of one of them…unless you are a liberal…

Jan 30, 2013 10:46am EST  --  Report as abuse
mountainrose wrote:

I’m shocked GDP would contract in this recovery . Labor dept reported almost 1.5 million new unemployment claims in Dec (which never includes self employed who may have lost jobs). 2013 GDP growth expected to be lower than 12 which was lower than 11 also lower than 2010. Supposed to go other way. .Jobs are in China. learn Mandarin

Jan 30, 2013 10:47am EST  --  Report as abuse
brotherkenny4 wrote:

Our leaders and businesses need to be even crueler than they have been. I mean jeez, hardly anyone is beaten with sticks anymore. The trolls here at Reuters won’t have a clue, everything to them fits into the standard failed ideologies. No, we need to be less tollerant and more cruel. The beatings will continue until morale improves. Our drunken frat boy business guys and weasel lawyer elected officials certainly can’t be blamed for the demotivation of the nation. Perhaps we need more brainwash effort and maybe drugs for the few intelligent people who remain and continue to ascert that the current ideologies are meant to enslave the populace for the benefit of corporate america.

Jan 30, 2013 10:55am EST  --  Report as abuse
SemperFi1969 wrote:

“Government spending tumbled at a 6.6 percent rate, as defense outlays plunged at a 22.2 percent pace, wiping out the previous quarter’s gains. Government subtracted 1.33 percentage points form growth. The decline in defense spending was the largest since 1972.”

And yet I read Obama’s personal wealth has grown from $3M to $30M in the four years he has been in office. I read other politicians wealth of the Democrat persuasion has grown proportionally as well. Where does the money come from? In one case it comes from the belly of soldiers slugging away in Afghanistan and around the world in many places we have never heard of.

Defense spending was cut at the expense of enlisted soldiers who are now greeted with closed messhalls and a sign saying breakfast is no longer served. My VA doctor tells me the biggest complaint she hears from soldiers returning from Afghanistan is they were very hungry all the time they were there. Seems like Obama has told Defense to limit food supplies to 2,500 calories per soldier per day. I have a government video that says soldiers in training and in combat require 12,000 calories per day. The doc says the soldiers in Afghanistan must buy their own food, if they can find any to purchase (not too many supermarkets in the lawless border regions.) I met an Army captain a couple of months ago, He said he recently resigned his commission because he was having to buy food for his soldiers out of his own pocket. Yet, the pockets of Obama and his cohorts continue to grow with the wealth of America. Obama is America’s greatest enemy. I do not understand why Americans are not howling for Obama’s hide.

Jan 30, 2013 10:59am EST  --  Report as abuse
jrj906202 wrote:

Just means govt(Federal Reserve) will continue or accelerate it’s fiat currency devaluation.That should be positive for prices of everything priced in fiat(which is everything).So,more asset appreciation.Houses,commodities,stocks and everything you buy getting more expensive.What a way to run a country.

Jan 30, 2013 11:42am EST  --  Report as abuse
jrj906202 wrote:

byrond2
Crazy guy,but that’s where the Dems are going.Blame everything on those who got ahead and prospered.Envy is the name of the game,for Obama and Dems.

Jan 30, 2013 11:46am EST  --  Report as abuse
jrj906202 wrote:

I’ll take a lower GDP,if it means less wasteful,inefficient govt.

Jan 30, 2013 11:47am EST  --  Report as abuse
bocomojoe wrote:

It’s no surprise. The Republicans refused to do anything to help get the economy moving, and dug in their heels over the “fiscal cliff” which they created. Their actions continued to raise doubts and kept the economy slow. They work for the 1% and against the best interest of the 99%. Red State conservatives are still asleep at the wheel, blaming everyone but themselves.

Jan 30, 2013 11:59am EST  --  Report as abuse
USAPragmatist wrote:

I see the normal doomsayers are here ‘cheering’ this bad news, sad.

Hopefully this is just a blip in the otherwise steady, but slow, upward trend the economy has been in in the last few years. From some of the latest news it appears as if the GOP has stepped back a bit from it’s orthodoxy, so hopefully there will be some meaningful legislation to help our economy. What we need is some sort of stability about what future tax/spending policies are going to be.

Jan 30, 2013 12:00pm EST  --  Report as abuse

I think helicopter ben will most likely kick those printing presses into overdrive until we run out of trees.

Jan 30, 2013 12:04pm EST  --  Report as abuse
jabberwolf wrote:

@byrond2
“The economy will only truly improve when the super wealthy are forced to spend their money in American in large quantities.”
How cute, is your name Fidel Castro or Chavez or Stalin maybe?

You dont FORCE anyone – you have to CREATE a place for them to spend, give them incentive to do so. This Obama-retardation is really making the country more stupid and its very sad to see.

You LOWER capital gains (like Canada), and you CUT spending. This has worked TIME AND TIME again. Spending more and going into debt has FAILED TiME AND TIME again. This is what happens when children do not get a good education and think that they cannot learn anything from history.

Jan 30, 2013 12:15pm EST  --  Report as abuse
AndrewBinga wrote:

More hope and change headed our way!

Jan 30, 2013 12:21pm EST  --  Report as abuse
susette wrote:

Gov spending plunged so there is your answer. That was a demand of the GOP. They talk about making jobs AND cutting spending. This is what always happens. A new recession. More unemployment. Happy new year.

Jan 30, 2013 12:24pm EST  --  Report as abuse
flashrooster wrote:

udidwht: Interesting how rightwing thinking always makes regulations and taxation the sinister boogie men for all that ills us without ever offering any proof to back it up. We have fewer regulations in place now than we ever have. Any economic system HAS to have regulations to function properly. Otherwise, the system will predictably be abused by the powerful at the expense of everyone else. If you have knowledge of world history, you’ll know that to be true. It hasn’t just happened before. It always happens.

The reason for the sluggish economy is pretty simple. It’s a lack of demand. This exposes the fallacy in supply-side economics. ‘If you build it THEY will come’ doesn’t work if THEY don’t have the money to spend. This is the result of industries raising the cost of goods and services while freezing wages. Healthcare costs alone are enough to guarantee the US economy will remain weak. The ONLY ones benefiting from our healthcare system are those who own businesses in the industry or own substantial numbers of shares of healthcare businesses. It’s stupid, obscene, and anti-American.

This is also why this is the wrong time to drastically cut government spending. Just ask Europe. Britain, for example, is teetering on the third leg of a triple-dip recession. The time to cut government spending was when the economy was stronger like when the Republicans were in charge under Bush. Instead, they drastically increased spending while cutting taxes. That policy hurt us all, and we’re still suffering from it. We need to increase spending, not cut it. Cut spending when we get back on our feet. It worked under Clinton and from Roosevelt through to Nixon. This is not liberal theory. It’s historical fact.

Jan 30, 2013 1:06pm EST  --  Report as abuse
RexMax46 wrote:

It’s amazing how there are people who are afraid to raise taxes for fear of the damage it might do to the economy, yet have no problem cutting spending, seemingly unaware of the same damage it would do to a struggling economy. Maybe if we didn’t loose all sense of fiscal responsibility in the aughts, we wouldn’t be in bad of shape as we are now. But as we don’t have a time machine, only two options remain. We can have a balanced budget OR a healthier economy, because there is no way we can have both.

Jan 30, 2013 1:26pm EST  --  Report as abuse
TheNewWorld wrote:

If Romney was President, it would be called the start of the Romney recession. Good thing we have Obama though, it is just a temporary decline.

Jan 30, 2013 1:50pm EST  --  Report as abuse
TheNewWorld wrote:

@GA_Chris

It is obvious you have never owned a business or been involved in a small business. Regulations and taxes are choking the life out of the small businesses.

Jan 30, 2013 1:51pm EST  --  Report as abuse
Bubba311 wrote:

“GDP unexpectedly shrinks”? Unexpectedly? To the contrary, it remains true that the U.S. economy almost certainly will not attain significant improvement in the face of this President’s underlying re-distributionist ideology, which is anti-capitalism, anti-business, and pro-big labor. If a healthy private sector economy is our goal, then we have the wrong President.

Jan 30, 2013 1:52pm EST  --  Report as abuse
TheNewWorld wrote:

Can anyone point me to the decreased government spending? I don’t see it anywhere in the 2012 budget. If anything it was increased.

Jan 30, 2013 1:54pm EST  --  Report as abuse
TheNewWorld wrote:

@flashrooster

“This is also why this is the wrong time to drastically cut government spending. Just ask Europe. Britain, for example, is teetering on the third leg of a triple-dip recession. The time to cut government spending was when the economy was stronger like when the Republicans were in charge under Bush. Instead, they drastically increased spending while cutting taxes. That policy hurt us all, and we’re still suffering from it. We need to increase spending, not cut it. Cut spending when we get back on our feet. It worked under Clinton and from Roosevelt through to Nixon. This is not liberal theory. It’s historical fact.”

Bush inherited a mild recession after the dot com bubble bust. His spending was designed to stimulate the economy which was weak. But you have hit on something I constantly say. Democrats and Republicans only know how to increase spending constantly to “fix” the economy. They did it under Bush, and they did it under Obama. They did it under Reagan, Bush Sr, etc. There is never a time that we can cut spending. Never. And that is the failure of modern keynesian economics.

Jan 30, 2013 1:57pm EST  --  Report as abuse
jabberwolf wrote:

@flashrooster EU is not suffering because government is spending less – its suffering because they are taxing MORE.
Businesses are packing up and leaving. They arent leaving because the postman wont deliver on Saturday anymore or the department of motor vehicles (EU equivilents?) are closed 1 more day!

They are leaving because government has decided TAX them more rather than cut. Cutting spending DOES NOT harm the economy, so long as they allow more people to KEEP their money! (remember when they are spending – they are USING other peoples money or debt money). And with the size of our debt its very apparent – it does NOT work.

Jan 30, 2013 2:15pm EST  --  Report as abuse
jabberwolf wrote:

@flashrooster EU is not suffering because government is spending less – its suffering because they are taxing MORE.
Businesses are packing up and leaving. They arent leaving because the postman wont deliver on Saturday anymore or the department of motor vehicles (EU equivilents?) are closed 1 more day!

They are leaving because government has decided TAX them more rather than cut. Cutting spending DOES NOT harm the economy, so long as they allow more people to KEEP their money! (remember when they are spending – they are USING other peoples money or debt money). And with the size of our debt its very apparent – it does NOT work.

Jan 30, 2013 2:15pm EST  --  Report as abuse
jabberwolf wrote:

My favorite BS line of the article:
“decline seen temporary”
Yeah because we always see a DECLINE during the Thanksgiving through Christmas season right?!
You have got to be kidding me !!!

Jan 30, 2013 2:16pm EST  --  Report as abuse
Crash866 wrote:

USAPragmatist
It’s called reality and facts not doomsayers or conspiracies.

“What we need is some sort of stability about what future tax/spending policies are going to be.” Really…how about private secotr jobs and a healthy economy…guess only bigger govenrment can create that…

Jan 30, 2013 2:58pm EST  --  Report as abuse
Crash866 wrote:

susette
So the GOP caused the GDP to fall? Not the bad economy that is not improving under the current adminstration? At what point is the current adminstration responsible for the issues we have had in the last four years and the next four years? Blaming GW and the GOP for America’s current and future pains is getting a little old. Also do you think big govt, more govt jobs, more taxing and spending will fix this? I give you the last 4 years and next four years as evidence that it hasn’t and won’t fix the GDP, economy and jobs problems.

Jan 30, 2013 3:04pm EST  --  Report as abuse
MikeyLikesIt wrote:

So after 4 years of Obama as president and 8 years of democrat control of congress, it’s STILL the Republican’s fault?

I guess the next question should be “Why would I vote for democrats when they are so powerless to stop the EEEEVVVILLL Republicans even when they have a SUPERMAJORITY in the senate?

By the way, Q4 is supposed to be the strongest quarter due to holiday spending. So if it’s bad, you can expect Q1 to be worse. Also these are government estimates, so you can guaran-damn-tee that they will be revised down later.

SING ALONG WITH ME!!!

“Happy days are here again!”
“The sky is turning clear again!”

Jan 30, 2013 3:30pm EST  --  Report as abuse
4ngry4merican wrote:

MikeyLikesIt wrote: “I guess the next question should be “Why would I vote for democrats when they are so powerless to stop the EEEEVVVILLL Republicans even when they have a SUPERMAJORITY in the senate?”

No, the next question is why are Republicans so factually challenged that they continue to believe the repeatedly debunked lie that the Democrats had a supermajority. The “supermajority” lasted for a whopping month and a half, from 7/7/09 when Al Franken was finally sworn in to 8/25/09 when Ted Kennedy died. And even then they didn’t actually have a working supermajority since Robert Byrd was hospitalized that whole time and unable to provide the 60th vote.

But hey, why let a silly thing like facts get in your way?

Jan 30, 2013 4:56pm EST  --  Report as abuse
altalks21 wrote:

If you want STABILITY, we need to concentrate on consumers, the 70% of the economy & the other Job Creators. The business sector cannot do this by itself. Businesses are still clamoring for consumer spending but consumer purchasing power is still weak. Though weakened, consumers kept the economy from going over the edge. Consumers & businesses are interdependent, that’s why we need to help the consumer sector till the U.S. Economy is balanced out.

Jan 30, 2013 6:27pm EST  --  Report as abuse
kevin2ia wrote:

Another data point on the graph of Obamanomic failures – worst president ever, bar none.

Jan 30, 2013 10:08pm EST  --  Report as abuse
MikeyLikesIt wrote:

@4ngry4merican

Because the RINOs in the senate surely voted in lock step with the Republicans every time right??

No wait, THEY DIDN’T!

So even if the dems didn’t have an official supermajority, they could still get the votes to avoid a filibuster. And what did they do with that power?

Well they forced Obamacare down our throats even though a majority opposes it, and they haven’t been able to pass a budget in over 3 years!

Job well done dems, job well done.

Jan 31, 2013 4:01pm EST  --  Report as abuse
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