First Quarter GDP -- Another indicator of trouble ahead?

The estimate from the government of growth in the Gross Domestic Product during the first quarter of 2012 was released this morning. It showed growth at an annual rate of 2.2% during the quarter. Most of the articles about this number tell us that the rate missed the expectations of the "experts" who had predicted growth of 2.6%. This, however, misses the main point in my opinion. We already know that there was unseasonably warm weather across much of the USA during the first quarter and that this had a big positive effect on many businesses. For example, Panera Bread reported earlier this week that its business during the first quarter rose by an extra 2% due to the warmer weather. Indeed, consumer spending across the country was raised as a result of better weather. The rate of growth of consumer spending in the first quarter was 2.9% according to this morning's report. This is an increase from the 2.1% rate in the fourth quarter of 2011. And this consumer spending was the main driver of GDP growth, again according to the report. If unusual weather caused the growth of consumer spending and then consumer spending growth caused a 2.2% growth in GDP, what will happen once the normal spring weather arrives? Will we see a slowdown of GDP growth? Are the recent upticks in weekly unemployment claims and the weak March job creation numbers simply a manifestation that the inflated growth rate due to warmer winter weather is ending? It is a difficult question to answer; we may need to just wait and see.

Let's be clear, however: a growth rate of 2.2% is unacceptable. It means few new jobs. It means high unemployment stays high. It means no growth in personal income. It means no growth in tax revenues that could pay for the enormous expenditures of the federal government under Obama. In other words, this anemic growth rate mean MORE OF THE SAME.

Something has to be done to grow the economy at a faster rate. We have all watched as Obama tried stimulus spending, green energy programs, and all manner of wasteful activities to get the economy moving. None of it worked; we get essentially no growth coupled with a huge debt. Admittedly, the Obama efforts were almost comical in their incompetence. Nevertheless, this is too serious an effort to be left to the amateurs in Obamaland.