Obama Recovery Shows Recession-Like Contraction In First Quarter

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By conventional standards, two consecutive periods of shrinkage in the Nation’s gross domestic product (GDP) indicates a recession. The Commerce Department Bureau of Economic Analysis released its revised assessment of first-quarter GDP growth on Thursday, and the numbers suggest we’re halfway there.

According to the Bureau’s revised analysis, the U.S. economy contracted by 1 percent in the first quarter of 2014. Thursday’s revision represents a small but significant reversal of the Bureau’s earlier estimate, which anticipated the economy would have grown by a stagnant .1 percent during the first quarter.

“The GDP estimate released today is based on more complete source data than were available for the ‘advance’ estimate issued last month,” the Commerce Department stated. “In the advance estimate, real GDP was estimated to have increased 0.1 percent. With this second estimate for the first quarter, the decline in private inventory investment was larger than previously estimated.”

The announcement comes on the heels of speculation among financial pundits that the news would be bad, but not that bad. Consensus among experts following last month’s Commerce report was marginally more hopeful, but Thursday’s report was “worse than the most pessimistic forecast in a Bloomberg survey of economists,” according to Bloomberg.

The Administration of President Barack Obama has blamed the contraction on a harsh winter, and many economists indeed received Thursday’s news with circumspection. “Inventories were the biggest negative, and this highlights a subtle change in how the economy works,” the American Enterprise Institute’s Kevin Hassett told The Washington Post. “Because of just-in-time inventory management, the economy is much more sensitive to bad weather than it used to be. Inventories are not sitting on shelves, they are in trucks. If the trucks get stuck, so does the economy.”

But The Post’s Jennifer Rubin followed that with this:

President Obama will no doubt claim it’s because they haven’t spent enough money, but that old saw isn’t fooling many people. Between a high corporate tax rate that discourages investment in the United States, Obamacare (effectively taxing labor and directly taxing medical device companies), an out-of-control Environmental Protection Agency, restrictions on domestic energy development and long-term debt hanging over us, this shouldn’t be a surprise.

Of course, the weather holds no influence over any of those things.

The economic contraction marks the first net decline in GDP in three years. And the GDP wasn’t the only indicator that performed poorly in the first quarter: Gross domestic income shrank by 2.3 percent.

Note from the Editor: Hyperinflation is becoming more visible every day—just notice the next time you shop for groceries. All signs say America’s economic recovery is expected to take a nose dive and before it gets any worse you should read The Uncensored Survivalist. This book contains sensible advice on how to avoid total financial devastation and how to survive on your own if necessary. Click here for your free copy.

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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