0.1%: Shrinkage of US economy in Q4 2012
The United States economy contracted by 0.1% in the 4th quarter of 2012, the first negative GDP reading in over three years. The news surprised many economists, who had predicted that the US would grow around 1%. Though the headlines surrounding the negative GDP number have seemed frightening, the report also had some positive points. Personal consumption actually rose and business investment was healthy.
The contraction was essentially a result of two factors: large drops in both government spending and inventories. The latter was hardly a surprise since much of the third quarter's jump in growth was attributed to a buildup in inventories. The bottom line: the GDP report was disappointing, but we would still expect growth to be positive in the first quarter of this year.
Source: BlackRock, February 2013
Prepared by BlackRock
Delivered courtesy Joel W. Grams, CRPC®, CLTC,
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