Negative gross domestic product means the economy shrank in the first quarter which is not a good thing. Unfortunately for your sister and many other people, they are jumping their guns. You should be asking your sister why she is talking about something that is now almost 3 months old. Then tell her if she is so anti-Obama, she will not be liking the number coming out for next quarter. I will give you a hint, it will not be a negative GDP. You should never ever look at one quarter of a year and make an assumption about the direction of the economy. Two quarters of negative growth would be a better indicator of an economy that is going into or is in a recession.

Well that is my take anyway.

And that is what I told her.


I never said anything about my sister being anti-Obama. We rarely talk about politics. I don't know which way she leans, or if she even votes at all. I just know the last few years have been really bad for her and her family, and telling her that bad news that is three months old does not make it any better news, and she's going to take me to task on it. Rightfully so, I might add!

From what I have taken from your statement I should try to tell her to look at next GDP coming out. When do we get those numbers? Why were todays numbers different from what they thought they would be when they came out?

Also, thank you for your help.

basically everything that's spent and exported

http://www.investopedia.com/terms/g/gdp.asp

Now, as the other guy said, it would be a real problem if this keeps up, but it's rarely happened that a whole year's GDP contracted. And it looks like the annual GDP will be a positive. At the moment, even with the drop it's still a hundred billion or so more than it was at this time last year

http://useconomy.about.com/od/GDP-by-Year/a/US-GDP-History.htm

Quarterly GDP is a affected by things like a severe winter, a hurricane, reduced military spending and other things that tend to even out over the year. Here are some specifics about what happened this time:

http://www.tradingeconomics.com/united-states/gdp-growth

She's no doubt using this to attack Obama and it's a talking point for the other side. Basically, tell her to wait a while to see if this is a trend or just a bad quarter.

A report issued Wednesday by PNC Financial Services Group Inc.’s economists said the following:

“A number of factors were behind the contraction in the economy in the first quarter. The big drag was the difficult winter, which caused consumers to postpone spending, disrupted production, led businesses to hold off on investment, and caused construction delays. Consumer spending growth was weak, growing just 0.7 percent at an annual rate after inflation. Inventories subtracted 1.7 percentage points from growth as businesses cut back on stockpiling. Business investment outside of inventories fell, and home building also contracted. Trade was a major negative, subtracting 1.5 percentage points from growth, revised from a 1.0 percentage point hit in the second estimate, as exports fell and imports rose. And government also subtracted from growth, despite expectations for a turnaround following the end of the federal government shutdown in late 2013.”

National defense spending also dropped 2.5%. More analysis at http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm .

It's mostly a one-time blip that the Republicans are seizing upon and most indicators for the second quarter of this year are looking positive.

There was a big cut in defense spending (as there should be). Everyone knows how brutal last winter was especially in the east. If we don't get our house in order and start making significant strides toward curbing climate change things will get worse.

year.

People got snowed in. Entire cities were shut down. Work didn't get done. The economy shrunk.



The economy also grew at ~2.6% in the fourth quarter of 2013. Projections have it growing at somewhere between 2.5% and 3.0% for each quarter for the rest of this year.


My suggestion is to go ahead and give ground on this one bad quarter. Then hammer her with text messages all day when we get the positive GDP numbers.

It was a blip.

The early bird and night crew checked in on this one! Thank you!