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Title: GDP Shows "Surprise" Drop for U.S. in Fourth Quarter
Source:
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URL Source: http://www.cnbc.com/id/100419252
Published: Jan 30, 2013
Author: AP
Post Date: 2013-01-30 16:51:00 by Capitalist Eric
Keywords: None
Views: 6568
Comments: 10
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus. The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter. The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts. Still, the weakness may be because of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth. And those volatile categories offset faster growth in consumer spending, business investment and housing -- the economy's core drivers of growth. Another positive aspect of the report: For all of 2012, the economy expanded 2.2 percent, better than 2011's growth of 1.8 percent. The economy may stay weak at the start of the year because Americans are coming to grips with an increase in Social Security taxes that has left them with less take-home pay. Subpar growth has held back hiring. The economy has created about 150,000 jobs a month, on average, for the past two years. That's barely enough to reduce the unemployment rate, which has been 7.8 percent for the past two months. Economists forecast that unemployment stayed at the still-high rate again this month. The government releases the January jobs report Friday. The slower growth in stockpiles comes after a big jump in the third quarter. Companies frequently cut back on inventories if they anticipate a slowdown in sales. Slower inventory growth means factories likely produced less. Heavy equipment maker Caterpillar, Inc. said this week that it reduced its inventories by $2 billion in the fourth quarter as global sales declined from a year earlier. The biggest question going forward is how consumers react to the expiration of a Social Security tax cut. Congress and the White House allowed the temporary tax cut to expire in January, but reached a deal to keep income taxes from rising on most Americans. The tax increase will lower take home pay this year by about 2 percent. That means a household earning $50,000 a year will have about $1,000 less to spend. A household with two high-paid workers will have up to $4,500 less. Already, a key measure of consumer confidence plummeted this month after Americans noticed the reduction in their paychecks, the Conference Board reported Tuesday. Economists expected the first reading on gross domestic product to show growth of 1 percent, down from the third quarter's reading of 3.1 percent.
Poster Comment: It's GAME OVER, folks... Reality is in BLUE, government propaganda is in RED. SURPRISE???
Only a fool would believe that the Depression hasn't been ongoing. 
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#6. To: Capitalist Eric (#0)
I could barely find news of this yesterday....and I was looking. And now it's 'stunning'? So to ReCap: Christmas was a disaster. Q4 GDP was a disaster. France GDP is a Positive Q4 + 0.3% and they're 'bankrupt'. What does that make us? ;}
Can you tell where this stunning news hit the tape?
Something just happened to ConocoPhilips..... ConocoPhillips (COP) -NYSE 57.96 Down 3.13(5.12%) 10:23AM EST - Nasdaq Real Time Price And T Boone Pickens grandson just died of a heroin overdose at TCU/Ft Worth.....just sayin'.....;}
#9. To: All (#8)
# PR Newswire # ConocoPhillips Announces Agreement to Sell Cedar Creek Anticline Properties for $1.05 Billion BSW # ConocoPhillips to Hold Fourth-Quarter Conference Call on Thursday, Jan. 31, 2013 BSW http://en.tengrinews.kz/companies/KazMunaiGas-buys-N-Block-BV-stake-from-ConocoPhillips-16524/ ALL I got. Buy whatever made COP miss, you can assume will not be good for the other Energy Corps.....;}
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#7. To: All (#6)
#8. To: All (#7)
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