While much of the Gross Domestic Product is driven by consumer spending, it is worth looking closer at the numbers reported earlier today. The GOP used the report to chastise Obama once again for his “failed policies”. In so doing they forget the findings were actually better than economists’ expectations. Additionally, they neglect to make not of impressive growth rates in the other GDP measures.
As can be seen in the chart below, housing lead the charge with growth just shy of 10%. Equipment and software rose 1.8% to 7.2 and Imports/Exports essentially evened one another out. We also saw that government spending was at -1.4% largely reflecting state and local reductions. It offers another glimpse at what government cuts mean for an economy in recovery. It provides a further view of how large cuts place a drag on such a recovery and is even more important now as Congress once again struggles with budgetary issues similar to the debt ceiling debate which culminated in the Tea Party downgrade of last summer.
After the summer debt ceiling debacle and the initial August 2011 numbers reflecting zero growth (later revised with positive numbers) there was heightened speculation for a double-dip recession. But much to everyone’s dismay and with manufacturing leading the way, 2011 ended on a very positive note going from a 0.4% growth rate to a 4th quarter rate of 3.0%. Fears subsided as estimates brightened for 2012. Yes, growth diminished from the peak in December last year but many see this as a weather induced shift in traditional production patterns and acknowledge the impacts of oil prices and eurozone struggles.
It’s worth noting amidst the broader industrialized world’s problems with the European Union debt uncertainty, Greece’s political and fiscal disasters, Spain and the UK knee deep in their own double-dip recessions, the United States has led the way out of the Great Recession with a recovery that spurs feelings of jealousy in other countries in the developed world. Even with the constant criticism leveled at Obama and the Democrats from the GOP, the country can take pride in its resourcefulness despite an ineffective Congress whose members have become more concerned with partisan-induced obstructionims rather than doing what is best for the country as whole. The policies that were able to break free of the gridlock have proven their effectiveness which should speak volumes about the need to continue along the same path. All that’s required is a congressional membership that is willing to climb over the walls of partisanship and respect the traditions of working together toward viable solutions.