Thursday, January 31st, 2013 07:42:19
The New York Times mobile app sent me a breaking news update Wednesday morning: “U.S. Economy Unexpectedly Contracted in Fourth Quarter.” Based on high government third-quarter spending and government policies and politics occurring during the fourth quarter, the slowdown should come as no surprise.
The third quarter final gross domestic product growth was 3.1 percent. That relatively high number (compared to full year 2011 at 2 percent) was driven primarily by an increase in inventories and an increase in government spending. While the growth number was hailed by many as a reason to cheer, it had to have been too good to be true, and we learned on Wednesday that it was. It represented a fluke of timing — not real growth.