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Farr: Are We Headed for Another Recession?
CNBC.com | January 31, 2013 | 01:15 PM EST

We've just received preliminary data about the pace of economic growth in the fourth quarter of 2012. The Commerce Department says that the economy shrank by 0.1 percent in the fourth quarter compared to the third quarter. The reported growth rate was much weaker than the consensus expectation for 1.1 percent growth and is also the lowest quarterly growth rate since the end of the " Great Recession " in June, 2009.

So what is going on here? Are we on the cusp of another recession, or were today's figures simply an aberration?

(Read More: Why This Is 'Best-Looking' GDP Drop You'll Ever See )

A closer look at the details will show that the headline figure of -0.1 percent is not indicative of the true underlying pace of economic growth.

Most importantly, a 6.6 percent decrease in government spending in the quarter subtracted 1.33 percent from the overall Gross Domestic Product growth figure. This decline in government spending was due to a 22 percent drop in defense spending in the quarter - the biggest such decrease in defense spending in several decades.

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