The weakness in the quarter doesn't seem to have much to do with weather effects, with consumption and business investment still ok while housing construction made a meaningful addition to growth in the quarter as well.
Nor does it have much to do with the "fiscal cliff" debate. Perhaps the slower build up of inventories could be attributed uncertainty over the "fiscal cliff", but the reality seems to be that the impact on growth seems to have been over exaggerated.
The chart below looks at the contributions to growth over a longer time period on a YoY basis to put more recent growth into perspective. Growth has been sub-trend for years now, which is a very poor outcome in the context of the decline in 2008/09.
The darker blue consumption component has been consistently adding less to growth than prior to the crisis and this probably wont change anytime soon. Business investment has been ok, although government spending has been a major offsetting factor. So far it has been mostly at a state and local level, but this will now transfer to the Federal level. Net exports have been pretty much neutral to activity.
The hope is that the light orange component of housing will start to make a more meaningful contribution, which should have positive spillovers into employment and consumption. But the upside here is not particularly high, perhaps we can get a bit closer to trend growth, but it will probably prove elusive.
