Obama official: Reduced gov't spending to blame for slowdown

A top economic aide to President Obama blamed reductions in government spending for a slowdown in U.S. economic growth in the first quarter.

Austan Goolsbee, the chairman of the Council of Economic Advisers, said that a slowdown in government spending was mostly responsible for the 1.8 percent growth in gross domestic product (GDP) between January and March, down from 3.1 in the fourth quarter of 2010.

"It was an expected slowdown," Goolsbee said in an interview on Bloomberg television. "The biggest driver was a reduction in government spending at the federal level, a big negative from defense spending."

The slowdown had largely been predicted by outside observers, and the Commerce Department, which released the first-quarter statistics, blamed a variety of factors — chiefly higher consumer prices, along with reduced spending.

Still, observers who predicted a slowdown are more optimistic about the chances of a recovery in later quarters — something the Obama administration is counting on as it begins the president's reelection effort.

"Nobody likes a growth slowdown," Goolsbee said. "We've got to have faster growth, but 2011 and 2012 are still looking fairly positive."

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