While many economists say the 0.1 percent decline in the fourth-quarter gross domestic product (GDP) isn’t as bad as it looks, financial commentator Robert Wiedemer, best-selling author of "Aftershock," says the number is actually worse than it looks.

That’s because the government only adjusts GDP numbers by an annual inflation rate of 0.6 percent, even though the Consumer Price Index rose 1.7 percent last year, he tells Newsmax TV in an exclusive interview. And given the slim magnitude of GDP change, the inflation number makes a big difference.

“I think this number could actually be significantly worse than what the government is saying,” Wiedemer notes. While government spending, particularly defense, was blamed for much of the slip, Wiedemer says it’s really just the vagaries of how the government measures its spending.

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Unadjusted numbers show that the government actually spent more in the fourth quarter than in the third quarter — $907 billion versus $877 billion, he says.

“Because of the way they sometimes measure government spending, it doesn’t always show up in GDP,” Wiedemer adds. “But it wasn’t that government spending went down. I think we all know that.”

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

This doesn’t mean GDP won’t grow in the first quarter, he maintains. It’s just that “the reality here is that the economy is much slower than many people, certainly the government, want you to believe — and even some members of the financial community want you to believe.”

Virtually all the world has joined the United States in its slow-growth mode, including most of Europe, Japan, Canada, Australia and Brazil.

“This [the U.S. slowdown] isn’t really an aberration from how the world economy looks, and I don’t think it’s all of a sudden just going to miraculously pick up in the next year,” added Wiedemer, a managing director of Absolute Investment Management, an investment-advisory firm for individuals with more than $300 million under management.

“Next quarter, maybe it picks up a little. … But I think it clearly indicates we’re part of the slowing world economy.”

Some might argue that the stock market is a leading indicator so that its sharp rise over the past year signals strength ahead for the economy. But Wiedemer disagrees.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

“How much of a leading indicator really was the market in 2008? I’m not sure it really led that well.” The market hit record highs in October 2007, about a year before the financial system nearly collapsed.

On a smaller scale, Apple stock’s explosive gains last year until September gave little warning of the company’s earnings slowdown that lay ahead, says Wiedemer, a regular contributor to Financial Intelligence Report, the flagship investment newsletter of Newsmax Media.

“I don’t know how much of a leading indicator the stock market is. In some ways it’s more of a cheerleader at times than a leading indicator.”

At this point the economy may be more of a leading indicator for the stock market than the other way around, Wiedemer says. “I think fundamentally what you’ve got is a slowing economy. … Obviously it’s going to make the market a little bit more worried.”

About Robert Wiedemer
Robert Wiedemer is a managing director of Absolute Investment Management, an investment-advisory firm for individuals with more than $300 million under management. He is a regular contributor to the Financial Intelligence Report, the flagship investment newsletter of Newsmax Media. Click Here to read more of his articles. Discover more about his book, "Aftershock," by Clicking Here Now.