Milwaukee-based expert says GDP not as bad as it looks
MILWAUKEE - The news sounds bad. The economy contracted at a rate of .1 percent in the fourth quarter. It's the first contraction since 2009. And contraction is the precursor to recession.
"It's not as bad as it sounds," Marquette University Economics Professor Dr. Abdur Chowdhury says when you dig into the numbers there are good signs.
"We did expect a drop in GDP. The negative growth is mainly due to a drop in defense spending."
That drop in military spending is the biggest cut in 40 years. In fact, Government spending cuts subtracted a total of 2.6 percentage points from GDP.
Back that out, and Chowdhury says there are a lot of good signs. "We do see a turnaround in the housing market." And Chowdhury says there's been positive movement in the labor market.
Chowdhury says one potential pitfall still facing the economy are still unresolved decisions about the nation's finances. Lawmakers will have to make those decisions in the coming months.
Chowdhury says it's also likely the negative growth number will weigh on consumer and business confidence.