From my very unskilled analysis, I think a few things are going on here.
1. I think this number is completely manipulated. I don’t think GDP went down 0.1% I would venture GDP is down3% – 7%.
2. we are still not getting anywhere near the real unemployment / labor rates. millions have fallen out of the labor pool and are not being counted. not only are they not counted, they will not be returning because their jobs are not returning. The millions of jobs we lost almost none will return.
3. the 3% tax hike on payroll / income is not new, but you then have to remember back to 2008 when Obama promised to “lower” taxes, only to lower the front end and raise the back end, so that paychecks did not go down, but up. in the aggregate, main street is on the chopping block.
4. there is no 0% tax rate bracket any longer. this is unprecedented. i don’t even know what they hope to gain from people that make $10,000 / yr. it will push them to get onto public assistance, which will be more than they could ever hope to contribute in income taxes. its a shot to the groin area, in my opinion.
This tiny bit of news is just one piece in a very large puzzle. we cannot concentrate on this one piece and make judgments just based on this one pice, but must fit it into the entire tapestry and then make judgments.
The nation’s economy unexpectedly shrank by 0.1 percent in the fourth quarter of 2012, casting fresh doubt on the strength of the economic recovery. The new estimate of gross domestic product (GDP) from the Commerce Department marks the first time the economy shrank since it was in the depths of the recession in mid-2009.
This is not news for anyone paying attention. Unemployment fell an entire 1% twice in the 4th quarter? yet ony 200,000 jobs were allegedly gained? NO! 400,000 people fell off the unemployment rrecords and out of the labor pool. There was no turn around in the economy. There are now over 25 million people out of the labor pool by my calculations. This doesn’t even include the under-employed. This notion of rebounding economy is bogus.
You cannot have actual growth with upwards of 15%-20% [real numbers] of the US being unemployed. They cannot buy goods and services. They cannot pay state, local and federal taxes. They cannot pay indirect taxes via tariffs and excise taxes. You cannot grow the economy with unemployed people.
For the past 4 years, the beltway has put out bogus labor numbers and fixing their books to show GDP expanding. They had the GDP expanding when we were still losing 500,000 jobs each month. People are just not paying attention. It’s as iff Berny Madoff is in the white house.