2013 GDP comes in at 1.9%, down from 2012′s 2.8%

posted at 10:01 am on January 30, 2014 by Ed Morrissey

The economy took a small step back from its previous quarter, the Commerce Department reported today, with GDP up 3.2% in Q4. Overall, 2013 also took a big step back from 2012, however, even if it appears that the momentum may have shifted a bit toward the end of the year. The advance estimate of fourth-quarter growth dropped a bit from Q3′s 4.1%, but the inventory expansion factor lessened considerably as well:

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 3.2 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and “Comparisons of Revisions to GDP” on page 5). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2014.

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

The deceleration in real GDP in the fourth quarter reflected a deceleration in private inventory investment, a larger decrease in federal government spending, a downturn in residential fixed investment, and decelerations in state and local government spending and in nonresidential fixed investment that were partly offset by accelerations in exports and in PCE and a deceleration in imports.

Year on year, the story looks more grim:

Real GDP increased 1.9 percent in 2013 (that is, from the 2012 annual level to the 2013 annual level), compared with an increase of 2.8 percent in 2012.

We lost significant ground again, in an economy that’s supposed to be recovering. This throws a big dash of cold water on Obama’s State of the Union bragging about his economic policies.

In one sense, though, the news is relatively good, especially after December’s durable-goods report showed a significant decline. It’s not entirely clear whether that got into the advance report, by the way, as the Q4 report shows a 5.9% over the entire quarter. The advance report uses estimates on several of these measures, and we’ll see in the interim report whether this figure drops.

The good news is that overall growth is still in the 3% range, where we have rarely been in this “recovery” since it began in June 2009. Real growth actually increased from Q3, too, as measured in real final sales of domestic product — the metric that strips out inventory expansion. That grew at a 2.8% annualized rate, better than Q3′s 2.5%. The gap between inventory expansion in the two quarters might be a bit of a warning shot, though, on the outlook from producers and wholesalers on the direction of the economy.

On the other hand, consumer activity looks worrisome:

Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 1.8 percent in the fourth quarter, compared with an increase of 3.9 percent in the third.

Personal consumption expenditures rose 2.3% year-on-year for Q4. That’s the best all year, but that’s not a great result from the holiday season.  Personal outlays kept pace with Q3, though, while the personal saving rate dropped from 4.9% to 4.3%.

Reuters put an uncharacteristically gloomy cast on the report in its headline, thanks in part to a small rise in weekly initial unemployment claims, but were cheerier on the actual data:

The number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend suggested the labor market continued to heal.

Initial claims for state unemployment benefits increased 19,000 to a seasonally adjusted 348,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 3,000 more applications received than previously reported. …

Gross domestic product grew at a 3.2 percent annual rate, the Commerce Department said, in line with expectations. While that was a slowdown from the third-quarter’s brisk 4.1 percent pace, it was a far stronger performance than earlieranticipated and was welcome news in light of a 0.3 percentage point drag from October’s partial government shutdown and a much smaller contribution to growth from a restocking by businesses.

Earlier in the quarter many economists were anticipating a growth pace below 2 percent given that an inventory surge accounted for much of the increase in the July-September period. Growth over the second half of the year come in at a 3.7percent pace, up sharply from 1.8 percent in the first six months of the year. It was the biggest half-year increase since the second half of 2003.

Overall, the quarter result isn’t too bad. The 2013 result shows that we should wait to break out the bubbly.


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Don’t worry, the economy will save the Dems.

NotCoach on January 30, 2014 at 10:05 AM

When even Congo has a better growth rate it’s time to worry.

Still, Dog Eater has had only 5 years to get things back on track, give him time.

Bishop on January 30, 2014 at 10:07 AM

Expect Obama to make his quarterly pivot to the economy sometime next week.

jon1979 on January 30, 2014 at 10:08 AM

Overall, the quarter result isn’t too bad. The 2013 result shows that we should wait to break out the bubbly.


Rewrite!

Overall, the first LIES on the quarterly result are told to suggest things aren’t too bad. But if we’ve learned one thing about statistics from the Obama administration, it is that the final results will be MUCH WORSE … which means the 2013 results are going to be UGLY when they finally see the light of day.

Of particular concern, the much higher deductibles required of millions of consumers are certain to have a significant impact in discretionary spending on an increasing basis as Obamacare starts to damage the economy throughout 2014.

.
Fixed for you, Ed. Update and a h/t would be nice.

PolAgnostic on January 30, 2014 at 10:09 AM

Bush was even worse than we thought.

kcewa on January 30, 2014 at 10:11 AM

Obama got a pen…
and a phone…

And he will not stand idly by

Electrongod on January 30, 2014 at 10:12 AM

Well, at least Obama’s reduced income inequality, right?

/sarc

gwelf on January 30, 2014 at 10:12 AM

We lost significant ground again, in an economy that’s supposed to be recovering.

Clearly the people who are responsible for Obama’s plunging popularity numbers, the ones who just discovered he is black, have stopped buying stuff too.

Happy Nomad on January 30, 2014 at 10:15 AM

Obama got a pen…
and a phone…

And he will not stand idly by

Electrongod on January 30, 2014 at 10:12 AM

No he will not. He will sit there in the oval office with his stinking feet atop a national treasure.

Happy Nomad on January 30, 2014 at 10:16 AM

If Dog Eater had spent less time making the oceans recede maybe things would be better, but at least the seashell collectors are happy.

Bishop on January 30, 2014 at 10:16 AM

I’m sure Obamacare is going to help. /

Cindy Munford on January 30, 2014 at 10:21 AM

Unexpectedly.

Lanceman on January 30, 2014 at 10:23 AM

University of Minn. Students Want Crime Alerts To Avoid Using Racial Descriptions

All of this is clearly the result of Obama’s world. Warn about criminals but avoid mentioning any of the details that might identify them. Pretend that the unemployment rate is below 7% by cooking the numbers on who is defined as unemployed. Continue claiming economic recovery when the numbers show stagnation at best.

We are losing this nation and a big part of it is the lack of honesty about what is really happening. Blacks would never commit crimes in MN, those folks that stopped looking for work decided to retire, and the economy is booming! Just ask Obama!

Happy Nomad on January 30, 2014 at 10:25 AM

Nobody will be madder than Obama when he hears about this.

rogerb on January 30, 2014 at 10:26 AM

Faith n begorrah, every thing will be fine,once total socialism is upon us.

celtic warrior on January 30, 2014 at 10:26 AM

I’m sure Obamacare is going to help. /

Cindy Munford on January 30, 2014 at 10:21 AM

It will help Obama and his co-conspirators. Something to pivot to in March if American Idol and Honey Boo Boo season finales are not enough to distract the LIVs.

Happy Nomad on January 30, 2014 at 10:27 AM

Obama got a pen…
and a phone…

And he will not stand idly by

Electrongod on January 30, 2014 at 10:12 AM

Electrongod: So does Team GOP:)
===============================

Mark Knoller ‏@markknoller 51m

In letter today to Pres Obama, @SpeakerBoehner says Republicans agree with his call for “a year of action.”
======================================

Cantor Press ‏@CantorPress 1h

.@GOPLeader @SpeakerBoehner @GOPWhip @cathymcmorris send letter to President urging action on common ground: http://majorityleader.gov/newsroom/2014/01/house-leaders-send-letter-to-president-obama-following-sotu-urging-action-on-common-ground.html
Retweeted by Speaker John Boehner
==================================

House Leaders Send Letter To President Obama Following SOTU Urging Action On Common Ground
Posted on January 30, 2014

WASHINGTON, D.C. – Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA), Whip Kevin McCarthy (R-CA), and Conference Chair Cathy McMorris-Rodgers (R-WA) today sent the following letter to President Obama urging the Obama Administration to work with the House this year on areas of common ground to help build an America that works for everyone. You may find a printable PDF version HERE.

http://majorityleader.gov/2014/01/letter-to-the-president-january-30-2014.pdf

Dear Mr. President,

In your State of the Union address on Tuesday night you said, “let’s make this a year of action.” We agree. Of course, under our Constitution, most action requires the Congress and the President to work together. Naturally, we don’t agree with all of the proposals you outlined in your speech, but where there is the potential for agreement we believe it is critical that we come together to advance the interests of the American people. In that spirit, we have identified four initial areas covered in your speech where the House has already acted and we believe we can work together without delay. In each area, a House-passed bill is already sitting in the Senate so there is no reason for further delay.
(MORE….)
==========

The American people are counting on us. Let’s get to work.

Sincerely,

John A. Boehner
Speaker

Eric Cantor
Majority Leader

Kevin McCarthy
Whip

Cathy McMorris-Rodgers
Conference Chair

http://majorityleader.gov/newsroom/2014/01/house-leaders-send-letter-to-president-obama-following-sotu-urging-action-on-common-ground.htm

canopfor on January 30, 2014 at 10:29 AM

I think we’re in for another wild economic ride this year. I follow Zero Hedge and the emerging markets have all started blowing up at once, particularly Argentina, Venezuela, Ukraine, Turkey, and South Africa. If we see this “contagion” spread into more of the emerging markets, it’s going to have an impact on the US economy.

Doomberg on January 30, 2014 at 10:30 AM

The economy took a small step back from its previous quarter, the Commerce Department reported today, with GDP up 3.2% in Q4. Overall, 2013 also took a big step back from 2012,
===========================

So,…its on track, for another Colossal, Embrace the Suck!!

canopfor on January 30, 2014 at 10:31 AM

All Hail the Perveyor of Pestilence.

Hey, I thought I’d add to the list of monikers from
thatsafactjack.

ToddPA on January 30, 2014 at 10:32 AM

2013 GDP comes in at 1.9%

LOL. Printing and borrowing TRILLIONS of dollars every single year to dump right into the economy in order to get … 300 billion in “growth”. Now, that’s quite a deal! It must be the sooper-geniuses in the White House working out those “profit AND earnings ratios” …

BTW, when Barky talked about “green shoots”, I think he meant what everyone was going to be reduced to eating when he was done with things. But, don’t worry, another “recovery summer” is just around the corner!!

ThePrimordialOrderedPair on January 30, 2014 at 10:34 AM

No worries Recovery Spring is just around the corner.

HumpBot Salvation on January 30, 2014 at 10:35 AM

Wow, that Obama is still awesome!

albill on January 30, 2014 at 10:36 AM

All Hail the Perveyor of Pestilence.

Hey, I thought I’d add to the list of monikers from
thatsafactjack.

ToddPA on January 30, 2014 at 10:32 AM

I like the alternative spelling. It adds an important dimension to it – an accurate one!

ThePrimordialOrderedPair on January 30, 2014 at 10:36 AM

No worries Recovery Spring is just around the corner.

HumpBot Salvation on January 30, 2014 at 10:35 AM

Eff You. I’m watching another 10 inches of white shiite land outside, spring is never coming in any form.

Bishop on January 30, 2014 at 10:40 AM

I just want to be happy so I’ll stick to reading the AP account:

For 2013 as a whole, the economy grew a tepid 1.9 percent, weaker than the 2.8 percent increase in 2012, the Commerce Department said Thursday. Growth was held back last year by higher taxes and federal spending cuts.

With that drag diminished, many economists think growth could top 3 percent in 2014. That would be the best performance since the recession ended in mid-2009.

I’m especially relieved to know the recession’s been over since 2009.

Drained Brain on January 30, 2014 at 10:40 AM

I’m especially relieved to know the recession’s been over since 2009.

Drained Brain on January 30, 2014 at 10:40 AM

Heh.

ThePrimordialOrderedPair on January 30, 2014 at 10:45 AM

All Hail the Perveyor of Pestilence.

Hey, I thought I’d add to the list of monikers from
thatsafactjack.

ToddPA on January 30, 2014 at 10:32 AM

ToddPA: Lol:)

canopfor on January 30, 2014 at 10:47 AM

“Focusing on and off like laser makes the economy look cool.” -President strObelight.

Flange on January 30, 2014 at 10:49 AM

Obama got a pen…
and a phone…

And he will not stand idly by

Electrongod on January 30, 2014 at 10:12 AM

New federal government redistribution program to be proposed in … oops, I’m a day late.

ShainS on January 30, 2014 at 11:32 AM

The Obama ‘recovery’ will be better known as the 6 year dead cat bounce….

On the bright side, we are seeing some growth despite all of the efforts of the Administration to emulate France / Greece. Imagine what would happen if the Administration took their jackboots off of the neck of the economy?

Athos on January 30, 2014 at 12:21 PM

At an off-the-record lunch at the White House in June 2012, President Obama explained that he had to win re-election or Mitt Romney would get credit for an inevitable recovery during what would be his second term.

“I’m not going to let him win … so that he can take all the credit when the economy turns around,” Obama said, according to Glenn Thrush’s new book “Obama’s Last Stand.

According to the book, Obama’s advisers knew by 2011 that a positive campaign based on the improving economy “just wasn’t in the cards” and planned early to hit Mitt Romney with a negative campaign.

OxyCon on January 30, 2014 at 12:23 PM

Keep voting democrat you imbecilic morons! Those oligarchs wont become plutocrats without your blind devotion!

Murphy9 on January 30, 2014 at 4:12 PM

Overall, the first LIES on the quarterly result are told to suggest things aren’t too bad. But if we’ve learned one thing about statistics from the Obama administration, it is that the final results will be MUCH WORSE … which means the 2013 results are going to be UGLY when they finally see the light of day.

Of particular concern, the much higher deductibles required of millions of consumers are certain to have a significant impact in discretionary spending on an increasing basis as Obamacare starts to damage the economy throughout 2014.

.
Fixed for you, Ed. Update and a h/t would be nice.

PolAgnostic on January 30, 2014 at 10:09 AM

Didn’t I see a report just what, 2 days ago, that said durable goods orders PLUNGED in December? 4.3% or some such, which is a “Big f-ing deal!” to paraphrase Senile Idiot. Expect an “adjusted” number to eventually point out that we’re on the road to another recession.

riddick on January 30, 2014 at 10:18 PM