The nation’s economic data revealed a surprise for the last three months of 2012 — and an unwelcome surprise at that.
America’s Gross Domestic Product, the broadest measure of economic activity, fell slightly in the final quarter of the year.
While the decrease was a small 0.1 percent, it is not the direction we want to see the economy heading.
We suppose you can take comfort in the assessment by many economists, who said that data was a bit of a fluke. Two key areas weighing heavily on the GDP figure were a drop in inventories — likely linked to the Christmas season after merchants had built up supplies — and a decrease in government spending. That’s something not expected to reoccur.
But remember all that talk at the end of the year about the fiscal cliff and scheduled cuts in government spending if Republicans and Democrats couldn’t get their acts together in Washington? Well, the deadline for those cuts was delayed for a couple of months, not resolved. Later this month, the same concerns may arise.
It’s worth asking why consumers, amid an apparent recovery, would express a lack of confidence. The explanation is obvious: Consumers were reacting to the nonsense in Washington. The fiscal cliff debacle would shake anyone’s confidence in this nation’s political leadership.
The GDP numbers and related economic data are warnings to Washington to shape up. Or else.