Final Q4 GDP growth pegged at 0.4%

posted at 9:21 am on March 28, 2013 by Ed Morrissey

It’s an improvement over the advance estimate issued two months ago of -0.1% contraction, but … not by much.  At least we won’t have to hear people talk about the greatest contraction evah:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.4 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, real GDP increased 0.1 percent. While nonresidential fixed investment is higher than previously estimated, the revision to GDP has not changed the general picture of the economy (for more information, see “Revisions” on page 3).

The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment, federal government spending, exports, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

The deceleration in real GDP in the fourth quarter primarily reflected downturns in private inventory investment, in federal government spending, in exports, and in state and local government spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in imports, and an acceleration in PCE.

One indicator shows a more positive outlook, at least relatively speaking. Real final sales of domestic product — what actually got sold to end users, as opposed to inventoried — rose 1.9% in Q4. That’s still a stagnation figure, but it does point out the negative impact of inventory transactions in this quarter, and gives perhaps a better indication of the direction of the economy without the swings of government spending. That improved even more than the overall number from the advance estimate, which was 1.1% in January.

Overall GDP in 2012 remained unchanged from the previous interim estimate at 2.2%. That is also a stagnation figure, hardly enough to boost job expansion, and far off from the Obama administration’s economic projections on which they based their budgeting over the last four years. It’s an improvement over 2011′s 1.8%, but again, not by much, and the trendline is dropping downward again.

On the other hand, corporate profits increased 6.8% in 2012, down slightly from a 7.3% increase in 2011. What does that tell us? Corporations are holding onto capital, unwilling to invest it in the American economy. Given the regulatory environment and economic policies of the Obama administration, don’t expect that to change.

Reuters isn’t impressed with the report, either, and notes a rise in weekly initial jobless claims:

Also, the U.S. economy expanded at a sluggish pace in the fourth quarter although a big gain in business investment and higher exports of services led the government to push up its previous estimate for growth.

Gross domestic product expanded at a 0.4 percent annual rate, the Commerce Department said, just below the 0.5 percent gain forecast by analysts in a Reuters poll.

The growth rate was the slowest since the first quarter of 2011 and far from what is needed to fuel a faster drop in the unemployment rate. It was, however, higher than the government’s previous estimate of a 0.1 percent growth rate.

Overall, the news for the economy wasn’t great Thursday.

Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 357,000, the Labor Department said. Still, they remained in the middle of their range for this year.

The prior week’s claims figure was revised to show 5,000 more applications than previously reported. Economists polled by Reuters had expected first-time applications last week to rise to 340,000.

Actually, the news isn’t that bad on the weekly claims.  We seem to have shifted the window from 360K-380K to 330K-360K over the last couple of months.  This metric is all correlative, but the trend is at least improving slightly.  If we’re not creating jobs at any sort of rate above treading water, we seem to be losing fewer of them.


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Final Q4 GDP growth pegged at 0.4%

This Economy’s on FIRE BABY!!

ToddPA on March 28, 2013 at 9:23 AM

Green shoots.

steebo77 on March 28, 2013 at 9:25 AM

Now, subtract the 40% of the budget we’re borrowing… That’s where the economy really is.

Archivarix on March 28, 2013 at 9:26 AM

Laser-like focus on jobs.

steebo77 on March 28, 2013 at 9:26 AM

Bin Laden is dead and GM is alive!

steebo77 on March 28, 2013 at 9:27 AM

I am so sick of these pathetic numbers being passed off as proof the rat-eared devil’s economic policies are working.

Happy Nomad on March 28, 2013 at 9:28 AM

Bin Laden is dead and GM is alive!

steebo77 on March 28, 2013 at 9:27 AM

Bin Laden may be dead but GM is on life support at best.

Happy Nomad on March 28, 2013 at 9:29 AM

So we’ve actually reached the point where 0.4% growth is considered good or at the very least better than expected? I always go back to the May 1992 SNL skit featuring Dana Carvey as Ross Perot:

“Hell, a chimpanzee can run this country and get 1% growth.”

Funny how 20 years later, our standards have diminished so greatly.

Doughboy on March 28, 2013 at 9:30 AM

The economy has turned the corner!

steebo77 on March 28, 2013 at 9:30 AM

Obama is awesome.

suck it wing nuts!

tom daschle concerned on March 28, 2013 at 9:31 AM

Thank you President Obama.

crr6 on May 1, 2011 at 10:45 PM

steebo77 on March 28, 2013 at 9:35 AM

Even with Bernanke’s uncannily-timed QE3 capital injections and the holiday season, this drag-a$$ economy still could only manage a crappy 0.4%?

Meanwhile, in China

Robert_Paulson on March 28, 2013 at 9:35 AM

Just a rounding error..

Electrongod on March 28, 2013 at 9:37 AM

The good news is that we are at least losing fewer jobs.

O_o

Well that seems like a good use of $1 trillion in stimulus, way to go, Dog Eater.

Bishop on March 28, 2013 at 9:38 AM

Is this the final, final, final number or only the final, final number?

If this keeps up the 2012 Q4 GDP could hit 5% by years end.

fogw on March 28, 2013 at 9:39 AM

Spin baby spin

cmsinaz on March 28, 2013 at 9:39 AM

Stagnation,it’s what’s for dinner.

docflash on March 28, 2013 at 9:41 AM

If we’re not creating jobs at any sort of rate above treading water, we seem to be losing fewer of them.

Wait until Obamacare kicks off.

rickv404 on March 28, 2013 at 9:42 AM

When I read these GDP and job reports it brings to mind a serial killer saying “well, I usually kill 5 people, but today I only killed 2. Soooo I think that’s an improvement wouldn’t you say?”

Then the MSM shouts hosannas and accolades to our glorious leader.

Gatsu on March 28, 2013 at 9:44 AM

Stagnation,it’s what’s for dinner.

docflash on March 28, 2013 at 9:41 AM

Actually, canned dog food is what’s for dinner.

steebo77 on March 28, 2013 at 9:45 AM

Laser-like focus on jobs.

steebo77 on March 28, 2013 at 9:26 AM

…after the family makes up for all the vacations THEY DIDN’T TAKE…in the election year!

KOOLAID2 on March 28, 2013 at 9:45 AM

It’s Recovery Summer Season IV!

Key West Reader on March 28, 2013 at 9:52 AM

The number is FAKE. They are using the wrong deflators. Pleaseohplease go look at consumer metrics institutes web site.

GDP is negative, folks. Every data point is POLITICAL. I really loathe politically crafted statistics. Statistics are already the darkest lies, but political statistics originate from a deeper ring, if you know what I mean.

dogsoldier on March 28, 2013 at 9:57 AM

The number is FAKE. They are using the wrong deflators. Pleaseohplease go look at consumer metrics institutes web site.

GDP is negative, folks. Every data point is POLITICAL. I really loathe politically crafted statistics. Statistics are already the darkest lies, but political statistics originate from a deeper ring, if you know what I mean.

dogsoldier on March 28, 2013 at 9:57 AM

Dude, don’t let the facts get in the way of the truth.

America is back baby! Newsweek told me so!

Also, Obama is awesome, and yes, Newsweek told me that too.

Gatsu on March 28, 2013 at 10:00 AM

nice ROI, a spending deficit of 1 trillon per year = less than 1% growth

LET IT BURN

burserker on March 28, 2013 at 10:01 AM

Newsweek declares: “America Is Back”

Robert_Paulson on March 28, 2013 at 10:09 AM

Gatsu on March 28, 2013 at 10:00 AM

Yeah, I know, I know.

burserker on March 28, 2013 at 10:01 AM

CEOs that perform like that get a huge bonus and a pressing need to “explore other opportunities.”

dogsoldier on March 28, 2013 at 10:11 AM

Stagnation is the new “normal”.

GarandFan on March 28, 2013 at 10:23 AM

If the numbers were real we might call it stagflation. maybe.

dogsoldier on March 28, 2013 at 10:32 AM

What we have here is a DEPRESSION

dogsoldier on March 28, 2013 at 10:32 AM

fundamentals are strong
trending in the right direction…
–touchdownpropagandist

tom daschle concerned on March 28, 2013 at 10:33 AM

This is disgusting. I don’t understand how this bozo got re-elected. Actually, I do. Romney and the GOP were asleep at the switch and let Obama get the narrative. Also they played too nice for most of the campaign and got tough when it was too late. Had they bombarded this bozo straight away, then we MIGHT (stress on MIGHT) have had a different outcome. Romney was tougher on his GOP opponents than on Obama for most of the campaign.

nyclakerfan on March 28, 2013 at 10:36 AM

Final Q4 GDP growth pegged at 0.4%

This Economy’s on FIRE BABY!!

ToddPA on March 28, 2013 at 9:23 AM

Breaking News: Obama “economists” dispatched in fire trucks to hose down economy with gasoline. Stated one, “whew, that was close. we don’t want people to get the wrong idea here.” Once the economy has cooled to a safe temperature, shovel-ready Obama-supporters will be brought in to bury the remains… Conservatives have scheduled a funeral for Saturday. Liberals have partnered with Westburo Baptists to protest the funeral.

dominigan on March 28, 2013 at 10:48 AM

If we’re not creating jobs at any sort of rate above treading water, we seem to be losing fewer of them.

When everybody is out of work, the number will drop to 0!

LoganSix on March 28, 2013 at 10:54 AM

We also have the 5th annual Summer of Recovery to look FORWARD to.

Compare GDP growth:

GW Bush annual growth in GDP – 1.6%

Obowma annual growth in GDP – 1.2%

How is this economy Bush’s fault 5 years later?
No,Obowma is an economic moron.

dthorny on March 28, 2013 at 10:56 AM

We also have the 5th annual Summer of Recovery to look FORWARD to.

Compare GDP growth:

GW Bush annual growth in GDP – 1.6%

Obowma annual growth in GDP – 1.2%

How is this economy Bush’s fault 5 years later?
No,Obowma is an economic moron.

http://economix.blogs.nytimes.com/2011/07/29/ranking-the-presidents-by-g-d-p/

dthorny on March 28, 2013 at 10:56 AM

Recovery Spring, version 5.0!

AZCoyote on March 28, 2013 at 11:00 AM

If we’re not creating jobs at any sort of rate above treading water, we seem to be losing fewer of them.

When everybody is out of work, the number will drop to 0!

LoganSix on March 28, 2013 at 10:54 AM

The workforce participation rate is the lowest in 65 years, they stopped looking for work and the U3 unemployment rate does not reflect the numbers of dropouts. The U6 number does reflect higher unemployment.

http://data.bls.gov/timeseries/LNS11300000

http://portalseven.com/employment/unemployment_rate_u6.jsp

dthorny on March 28, 2013 at 11:01 AM

What this shows is that the “improvement” in employment numbers is almost exclusively a function of people leaving the workforce and not any increase in jobs. Further, the “success” in the stock market at the low volumn of trading is just wealthy elitists and institutions playing with QE3 money from the Fed. The economy is going down the crapper.

tommyboy on March 28, 2013 at 11:16 AM

What difference does it make now, anyway? /s

farsighted on March 28, 2013 at 11:26 AM

Had they bombarded this bozo straight away, then we MIGHT (stress on MIGHT) have had a different outcome. Romney was tougher on his GOP opponents than on Obama for most of the campaign.

nyclakerfan on March 28, 2013 at 10:36 AM

Even now, Dems don’t get blamed.

The problem was that John Q. linked Mitt to Wall Street and big money.

From last year:

A new Rasmussen Reports national telephone survey finds that just 14% of American Adults now believe the federal government has been aggressive enough in pursuing possible criminal behavior by major Wall Street bankers. Seventy-one percent (71%) disagree and think the government has not been aggressive enough. That’s up from 64% last May. Another 16% are not sure. Thursday, May 17, 2012, Rasmussen, 71% Say Government Hasn’t Been Tough Enough On Wall Street

IlikedAUH2O on March 28, 2013 at 1:10 PM

How is this economy Bush’s fault 5 years later?
No,Obowma is an economic moron.

dthorny on March 28, 2013 at 10:56 AM

Because the libs tell everyone that every chance they get.

Now, TRILLIONS in weak mortgages (the Dems wanted) seem a problem waiting to happen to me, but they just get the scapegoat out.

See, Wall Street securitized and sold them. Duh, that is kinda what they do.

The last thing anyone wanted was an investigation. Fannie and Freddie were really looking bad.

President Bush and the RINOS had a nervous collapse or something and then we have the perfect crime.

IlikedAUH2O on March 28, 2013 at 1:15 PM

dthorny on March 28, 2013 at 10:56 AM

Last night on The Factor we had the brave and bright Bob Beckel taking a shot at Wall Street for wrecking the economy and nobody has the sophistication and backbone to correct him.

Those loans to people who couldn’t afford them would have been GREAT just sitting in bank portfolios.

And which political side wanted the banks to get looser than an overweight freshman girl at her first frat party?

IlikedAUH2O on March 28, 2013 at 1:19 PM

I think the real story, not reported here, is that there was a .4% growth after $trillions in spending (the G pard of GDP)… it’s contracting, not growing weakly.

John_G on March 28, 2013 at 4:20 PM

Why didn’t the headline say “unexpectedly?” Bad economic data is always “unexpected.”

As soon as we get any good economic data, I’ll tell you what they “always” say about it, too.

Wino on March 29, 2013 at 1:56 AM