Last week's BEA report showed real GDP growing by 3% at an annual rate in Q4 2011. But as First Trust Portfolios
pointed out, the non-government, private components of GDP (consumption, investment and net exports) grew at 4.7% (see chart above) in Q4. In contrast, there was a 4.4% decline in government purchases in Q4, which created a drag on overall economic growth and brought real GDP growth down to 3%. The decrease in government spending was "driven by a wind-down of operations in Iraq and continued state and local spending cuts."