A couple of months ago, we talked about a preliminary report showing the U.S. economy shrunk slightly in the last three months of 2012. Today, that figure received its second and final revision, and though it's hardly great news, the economy at least fared better than previously believed.
The U.S. economy grew 0.4% in the 2012 fourth quarter instead of the prior estimate of a 0.1% gain, boosted by higher exports and business investment than originally believed. While that's the slowest growth since the 2011 first quarter, the latest figures suggest the economy continued to expand at a modest pace in the fourth quarter after stripping out the effects of inventories and an unusually large drop in government spending.
That last point is of particular interest -- without the "unusually large drop in government spending," economic growth would have been significantly stronger.
It's with this news in mind that congressional Republicans are arguing that the nation will benefit if they slash public investments further and take additional capital out of the economy.
Looking ahead, there's some evidence that economic growth will improve in the current quarter, which ends on Sunday, and about which we'll have preliminary data next month. For now, however, the U.S. has seen 14 consecutive quarters of economic growth, starting in mid-2009, when President Obama's Recovery Act (aka, the stimulus) helped put the nation on stronger footing.
As for the image above, the chart shows GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.