Dismal Fourth Quarter GDP: Now With Slightly Less Dismal
Great news: GDP didn't shrink in the fourth quarter! Instead, it grew . . . at a 0.1% annual pace.
Obviously, this is not great news. Of course, it's nice that the economy didn't actually shrink. But given the measurement error inherent in calculating GDP, this is very nearly a distinction without a difference. We aren't going to fix our broken job market, or our government finances, with this kind of anemic growth.
The real question is what happens next quarter: was this a blip, or will we see similarly anorexic numbers for the first quarter of 2013? There are reasons to be cheerful: personal consumption expenditures were up last quarter, and the housing market seems to be recovering just a bit. But there are also reasons to be pretty grim: the tax hikes, the sequester, and a retail sector that seems to be struggling just to stay in place.
Five years after the financial crisis, the economy is still basically treading water. Can we really stand a sixth?