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A quick reminder: What’s holding GDP back is the drag on government spending. Austerity, basically.

As Simone Foxman pointed out, today’s number wasn’t that bad.

Personal consumption rose quite nicely. Other private numbers were fine.

What got crushed: Government spending.

Karl Smith clarifies:

Federal Government: Subtracted 0.46 pts. SMACK. That is much bigger than expected and almost all comes from military drawdown. Two big quarters in a row of shrinking military expenditures.

State and Local: Subtracted 0.14. Surprisingly high and looks like its coming from lack of highway investment. What the political endgame on that is I don’t know.

Here’s chart showing American austerity.

chart of the day, Real Government Consumption Expenditures And Gross Investment, 3 Decimal (GCEC96), april 2012

SEE ALSO: Jeff Gundlach’s gloomy presentation on the state of the economy >

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