joel naroff, let me start with you. this was a surprise to most people. what's behind the kr-pgs last quarter? >> well, it was largely the government's doing between the largest cutback of 40 years in defense which took well over a percentage point of growth out and the fears of falling off the fiscal cliff which caused businesses to be really, really cautious in their inventories and they failed dramatically, taking another percentage point or more out. those were the basic reasons. but, you know, as was noted, when you look at the fundamentals and details of what's going on in businesses and households and housing, those are all solid. i think that really says this economy has forward momentum despite what the numbers seem to indicate. >> brown: i want to come back to momentum. but the first two points you made, first about government cuts, we've heard a lot about that but companies restocking at a slower rate, what's behind that? what does that tell you? >> well, i think really what happened was that businesses were really cautious. uncertain about whe

joel naroff, let me start with you. this was a surprise to most people. what's behind the kr-pgs last quarter? >> well, it was largely the government's doing between the largest cutback of 40 years in defense which took well over a percentage point of growth out and the fears of falling off the fiscal cliff which caused businesses to be really, really cautious in their inventories and they failed dramatically, taking another percentage point or more out. those were the basic reasons. but, you know, as was noted, when you look at the fundamentals and details of what's going on in businesses and households and housing those are all solid. i think that really says this economy has forward momentum despite what the numbers seem to indicate. >> brown: i want to come back to momentum. but the first two points you made, first about government cuts, we've heard a lot about that but companies restocking at a slower rate, what's behind that? what does that tell you? >> well, i think really what happened was that businesses were really cautious. uncertain about whet

joel naroff said, look at shoppers leaving the malls. are they empty handed or still carrying several bags? and paint prices. it's more than just a fresh coat. it the writing on the wall. more demand for paint and it's key ingredients send the prices up. all things to watch for and tonight, the walters say they'll be looking, as they look for more pralaces to travel to. >> we can think about those places we'd like to travel that are still on our bucket list. >> reporter: there are many places still on their bucket list. and you heard the economists there say, while we're not there yet, that the foundation of this recovery is real. watch for those trucks on the entertainment, watch for the paint prices, when they start to go up, there's real demand. >> the big picture tonight from david muir. thank you. >>> and we want to bring you upto date on the eerie sight in china tonight. you know they are battling polluted smog, so thick, you can barely make out those cars on the highway. more than 100,000 masks are being sold every day this month