January 30, 2013
The United States economy unexpectedly reversed course in the final quarter of 2012 and contracted at a 0.1 percent rate, its worst performance since the aftermath of the financial crisis in 2009.
What could cause such alarming and completely unforeseeable results?
The drop was driven by a plunge in military spending, as well as fewer exports and a steep slowdown in the buildup of inventories by businesses. Anxieties about the fiscal impasse in Washington also contributed to the slowdown.
While economists expected output to decline substantially from the 3.1 percent annual growth rate recorded in the third quarter, the negative number caught Wall Street off-guard. It was the weakest economic report since the second quarter of 2009.
“I’m a little surprised,” said Michael Feroli, chief United States economist at JPMorgan. “It grabs your attention when you have a negative number across everyone’s screens.”
It's a good thing we don't have to worry about further decreases in military spending... you know, like a 20% pay cut for civilian DoD employees.
Or 46,000 Pentagon layoffs. Isn't it funny how the Obama administration keeps telling us that government is the engine of economic growth and prosperity?
Except for the military, which somehow isn't. Whenever I start to feel bad about this, I console myself with the comforting thought that immigration reform for same sex couples is receiving the full attention of President Obama.
Priorities, people.... that's what real leadership looks like.
Posted by Cassandra at January 30, 2013 08:17 AM
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A story I heard on CFN over here in Germany last week seemed to indicate that Canada, at least, sees our government spending as a means of "propping up" our "failing economy" and they aren't certain how much longer we'll be able to keep it up, given the fact that we are so "heavily indebted."
I believe the rest of the world is expecting to either bail us out or watch us crash.
Posted by: Ddr at February 6, 2013 11:38 AM