GDP down, unemployment claims up, Jobs Council fired … say, what?

Let me be sure that I have this right.

According to the WSJ …

The government reported that the U.S. economy shrank for the first time in more than three years in the fourth quarter of 2012.

Gross domestic product — the broadest measure of goods and services churned out by the economy — fell at a 0.1% annual rate in the fourth quarter of 2012.

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The drop, a surprise, was driven by a sharp fall in government spending and by businesses putting fewer goods on warehouse shelves, as well as by a decline in exports.

A one quarter contraction of economic output doesn’t mean the economy is formally in recession, but it is unusual for such contractions to happen in the middle of economic expansions.

In fact,  a similar drop has only happened one time in the past fifty years.

Of course, the media bellowed that the number wasn’t as bad as it looked since much of the hit came from a drop in government spending which, incidentally, had surged in the pre-election 3rd quarter.

Hmmm.

* * * * *
The story gets better …

The dismal GDP report was followed by an increase in weekly unemployment claims.

CNBC reported:

The Labor Department reported that applications rose 4,000 to a seasonally adjusted 371,000, the most in five weeks.

Robert Kavcic, senior economist at BMO Capital Markets, said in a note to clients. “Claims stubbornly refuse to break below the … range that has been in place for the past year.”

MSNBC’s Rachel Maddow blurted in her blog: “Jobless claims climb, but remain below threshold.”

What threshold?

She explained: “In terms of metrics, when jobless claims fall below the 400,000 threshold, it’s considered evidence of an improving jobs landscape,”

Let the good times roll, right?

* * * * *
Well, given that the GDP decline “wasn’t that bad” … and that the increase in unemployment claims “was beneath the threshold”, President Obama did the only logical thing.

Obama declared his Jobs Council a success and disbanded it.

Reuters reported:

“White House disbands jobs council despite slow employment growth”.

The White House disbanded President Barack Obama’s jobs council, a group of high-profile chief executives who gave advice on how to spur employment growth.  even as 12 million Americans remain out of work.

Note that President Obama (a person) didn’t disband the Council,  the White House — an inanimate object — did the dirty work.

As I’m fond of saying: you just can’t make this stuff up.

* * * * *
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One Response to “GDP down, unemployment claims up, Jobs Council fired … say, what?”

  1. barttimm Says:

    Excellent article, Ken, I shared it on LinkedIn, Facebook and tweeted it. It is spot-on.

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