Sequester Drag add

And today we highlight Ed Dolan’s take on 1st quarter growth. He too points to the government as a major impact:

“Shrinkage of the government sector, which has had a negative impact on growth throughout the recovery, was more rapid than previously reported. Every sector of government—federal defense and nondefense, state and local—made a negative contribution to growth in Q1.”

Take a look here for the impact, positive-negative, of different sectors contribution to growth:

Not sure how the belief that cutting government right now is good for the economy is staying alive. Or maybe it’s just that our representation has vowed not to agree to the “other guys” idea. But the data is pretty strong. My hunch is we’ll see the impacts of this slowdown in next months labor data. If there is goodness here…it’ll likely be the Fed easing off the QE taper talk. Then at least someone will still be pushing money into the system.

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