WH Economic Advisor Says Q1 GDP Would be 3.5% (Instead of 2.2%) if Not for Gov ‘Cuts’

Alan B. Krueger, the Chairman of the Council of Economic Advisers to the President writes at WH.gov: Overall GDP growth was weighed down by reduced spending in the government sector, however. According to the Bureau of Economic Analysis, national defense expenditures fell by 8.1 percent in the first quarter.  Government spending across all levels subtracted 0.6 percentage point from overall GDP growth.  The latest report continues a pattern of moderate growth in the private sector components of GDP and contraction of the government components of GDP.  The second graph below displays the four-quarter percent change in the private components of real GDP and of government spending.  If only the private sector components of GDP are considered, GDP grew by 3.5 percent in 2012 Q1.
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