About that Economic Recovery... (Q4 2012 was negative)

[cthulu2016]

I hope everyone understands that just because it is convenient to believe in the economic recovery when running for re-election, that doesn't mean that the economy is really... y'know... recovering, except in the sense of not being as bad as it was at some previous time.

People with chronic illnesses have good days and bad days. The good days are not "recovery."

While our national leaders debated the relative merits of gratuitously hurting the economy a lot in 2013 (Republican plan) versus gratuitously hurting the economy somewhat in 2013 (Obama plan) the economy was, during the 4th quarter of 2012, growing by -.1%.

(Saying the economy is growing by a negative number is so much friendlier than saying it is shrinking.)

And to people who think the public cares about the fucking defecit... what people actually care about is things like the economy shrinking.

People are so poorly informed that most think that the deficit causes low growth. Their deficit concern is a misguided expression of their real interest, which is wanting greater economic growth.

The way one handles that is providing higher growth, not pandering to deficit concern.

WASHINGTON (AP) -- The U.S. economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts.

http://finance.yahoo.com/news/us-economy-shrinks-0-1-133115372.html

[unblock]

1. apparently much of this is due to the timing of defense spending, not defense "cuts".

so there's reason to think this is a bit of an anomaly.

[Squinch]

2. Did you see the Krugman segment on Mourning Joe? I can't watch the show, but there were clips

posted here.

Worth the wade through Mika's rude sneering and Joe's blathering stupidity.

[Enrique]

3. and now we're heading into the sequester battle

the defense sequester was supposed to be to put pressure on the GOP, but it's looking like it's going to put pressure on us.

I'm not sure yet how much I believe what this story says about this being caused by defense cuts, but if it's true then even I might end up urging Obama to keep the sequester from happening.

[cthulu2016]

5. I don't think there were defense budget cuts (per se) in Q4

Less was spent on defense during the 4th quarter due to some scheduling issues, and I don't want to appear to be blaming anything on cuts that have not even happened yet.

But the fact that defense sending is spending often seems lost here. It is fine to cut defense as long as something of equivalent economic impact is expanded.

But cutting defense means laying off some people somewhere.

Defense may be unwise spending but it is keeping a lot of mortgages paid. Any cuts that are not offset by something of equal money-distributing effect mean higher unemployment. No way around it.

[pampango]

4. “So, less war, more business investment. This was a good report."

“Government outlays dropped at a 6.6 percent annual pace from October through December, subtracting 1.3 percentage points from GDP. The decrease was led by a 22.2 percent fall in defense that was the biggest since 1972, following the Vietnam War.”

http://www.bloomberg.com/news/2013-01-30/economy-in-u-s-unexpectedly-shrinks-as-defense-spending-plunges.html

...some, including Bank of America’s Michelle Meyer, are still very optimistic about growth and think that the GDP number was actually good, given the defense cuts and reduced farm inventories due to drought.

http://www.businessinsider.com/michelle-meyer-gdp-was-grossly-distorted-and-you-should-fade-the-headline-2013-1

Business Insider‘s Joe Weisenthal was even more upbeat, noting that the “bad” number is largely the result of war drawdown, while consumers and business continued to spend.

“So, less war, more business investment. This was a good report.”

http://www.businessinsider.com/todays-shock-negative-gdp-report-really-wasnt-that-bad-2013-1#ixzz2JU1jbPgG

[cthulu2016]

6. Not as bad as it appears is not the same as good

This report features several one-offs and special circumstances making it appear worse than it is. That is true.

It does not follow from that, however, that it was in any sense a GOOD report. "Less bad than it looks at first glance," is not good.

Expectations were for weak. (1%) The report came in 1.1 points below weak.

For the year, 2012 came in at 2.2% growth. That is not much of a self-sustaining recovery, it is stagnation. It is lingering in the danger zone.

There were excuses for this Q4 report... special cases. True.

But after the payroll tax holiday expiration that began January 1, and a probable government shutdown and some sort of sequestration deal in the next couple of months, do know Q1 2013 will face challenges.

If Q1 2013 posts another "good" report like this one we will officially be in a recession (2 consecutive quarters of negative growth) after two "good" reports, and will thus be in a "good" recession.

[dmallind]

7. Yeah but when they have a dozen or so +2% days and then one -0.1%, it still is a recovery

It's not like GDP reports in the last three years have been up and down - they've been up constantly but for this storm and timing-driven tiny backstep.

You ca, and should IMO, say that the recovery is painfully slow, but to pretend it's nt happening because of one fractional downturn is silly. If the next quarter is also negative, and by more than a rounding error, then we can maybe start dissing the idea of a current recovery (while still not being rationally able to pretend the last 3 years weren't one), but not yet.

[cthulu2016]

8. If 2% is a recovery then you would be right.

[dmallind]

11. And what else could it be? Getting better is what recovery means. Not being perfect. nt

[Demo_Chris]

9. I suggest 4 more years of Diet-GOP. ALL the great trickle down, with half the social conservatism.

[Egalitarian Thug]

10. LOL! +1