Rep. Kevin Brady (R-TX), Chairman of the Joint Economic Committee, commented on today’s report from the Bureau of Economic Analysis that real gross domestic product (GDP) increased at an annual rate of 2.5% during the 1st-quarter 2013.
“Growth in the first quarter was weaker than expected in large part because of a decline in the growth rate of business investment in new buildings, equipment, and software. Without strong business investment, millions of Americans will remain unemployed,” Brady said.
“The good news is that our economy grew at an annual rate of 2.5% during the 1st-quarter of this year. The bad news is that even at this rate, the economy may never get back to the growth of an average recovery. In fact, we would end the decade with an even larger growth gap than we already have,” Brady said.
“Even with the economy growing at an annual rate of 2.5% in the first quarter, the growth gap in real GDP compared to other post-World War II recoveries stands at $1.2 trillion. The annualized growth rate during this recovery remains an anemic 2.1% over 15 quarters compared with the average of 4.4% during other recoveries over the same period.”
Brady noted that, “The bounce back in today’s report also reflects an artificially depressed fourth quarter report driven by a shift of defense spending from the fourth quarter into third quarter of 2012. Without that shift, today’s report would have shown real GDP increasing by only 1.9%.”
An analysis* by the Joint Economic Committee staff found that absent the shift of those expenditures, third quarter 2012 real GDP would have grown at a rate of 2.5% instead of the reported 3.1% and fourth quarter 2012 real GDP would have grown at a rate of 1.6% instead of the reported 0.4%.
“If we want to get Americans back to work, we must get government out of the way of our free enterprise system. We must put our fiscal house in order by reducing federal spending relative to the size of the economy and getting the Federal Reserve out of the business of allocating credit. We must enact pro-growth tax reform and eliminate unnecessary regulations that hamper innovation and job creation,” Brady concluded.