Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsUS economy shrinks 0.1 pct., first time in 3½ years; deep cut in defense spending key factor
US economy shrinks 0.1 pct., first time in 3½ years; deep cut in defense spending key factor
WASHINGTON The U.S. economy unexpectedly shrank from October through December for the first time since 2009, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The drop occurred despite stronger consumer spending and business investment.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That was a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.
Economists said the drop in gross domestic product wasnt as bleak as it looked. The weakness was mainly the result of one-time factors. Government spending cuts and slower inventory growth, which can be volatile, subtracted a total of 2.6 percentage points from GDP.
But the fact that the economy shrank at all, combined with much lower consumer confidence reported Tuesday, may raise fears about the economys durability in 2013. Thats because deep automatic government spending cuts will cut into domestic and defense programs starting in March unless Congress reaches a deal to avert them.
- more -
http://www.washingtonpost.com/business/us-economy-shrinks-01-pct-first-time-in-3--years-deep-cut-in-defense-spending-key-factor/2013/01/30/9dc71c80-6ae1-11e2-9a0b-db931670f35d_story.html
WASHINGTON The U.S. economy unexpectedly shrank from October through December for the first time since 2009, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The drop occurred despite stronger consumer spending and business investment.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That was a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.
Economists said the drop in gross domestic product wasnt as bleak as it looked. The weakness was mainly the result of one-time factors. Government spending cuts and slower inventory growth, which can be volatile, subtracted a total of 2.6 percentage points from GDP.
But the fact that the economy shrank at all, combined with much lower consumer confidence reported Tuesday, may raise fears about the economys durability in 2013. Thats because deep automatic government spending cuts will cut into domestic and defense programs starting in March unless Congress reaches a deal to avert them.
- more -
http://www.washingtonpost.com/business/us-economy-shrinks-01-pct-first-time-in-3--years-deep-cut-in-defense-spending-key-factor/2013/01/30/9dc71c80-6ae1-11e2-9a0b-db931670f35d_story.html
Anyone get the sense that a push is being made to avoid defense cuts associated with sequestration?
Comments on Q4 GDP and Investment
by Bill McBride
The Q4 GDP report was negative, with a 0.1% annualized decline in real GDP, and lower than the expected 1.0% annualized increase. Final demand increased in Q4 as personal consumption expenditures (PCE) increased at a 2.2% annual rate (up from 1.6% in Q3), and residential investment increased at a 15.3% annual rate (up from 13.5% in Q3).
Investment in equipment and software rebounded in Q4 (increased at 12.4% annualized rate), and investment in non-residential structures was slightly negative.
The slight decline in GDP was related to changes in private inventories (subtracted 1.27 percentage points), less Federal Government spending (subtracted 1.25 percentage points), and a negative contribution from trade (subtracted 0.25 percentage points).
Overall this was a weak report, but with some underlying positives (the increase in PCE and private fixed investment). I expect the payroll tax increase to slow PCE growth in the first half of 2013 - and for additional government austerity - but I think the economy will continue to grow this year.
- more -
http://www.calculatedriskblog.com/2013/01/comments-on-q4-gdp-and-investment.html
by Bill McBride
The Q4 GDP report was negative, with a 0.1% annualized decline in real GDP, and lower than the expected 1.0% annualized increase. Final demand increased in Q4 as personal consumption expenditures (PCE) increased at a 2.2% annual rate (up from 1.6% in Q3), and residential investment increased at a 15.3% annual rate (up from 13.5% in Q3).
Investment in equipment and software rebounded in Q4 (increased at 12.4% annualized rate), and investment in non-residential structures was slightly negative.
The slight decline in GDP was related to changes in private inventories (subtracted 1.27 percentage points), less Federal Government spending (subtracted 1.25 percentage points), and a negative contribution from trade (subtracted 0.25 percentage points).
Overall this was a weak report, but with some underlying positives (the increase in PCE and private fixed investment). I expect the payroll tax increase to slow PCE growth in the first half of 2013 - and for additional government austerity - but I think the economy will continue to grow this year.
- more -
http://www.calculatedriskblog.com/2013/01/comments-on-q4-gdp-and-investment.html
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
7 replies, 1134 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (0)
ReplyReply to this post
7 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
US economy shrinks 0.1 pct., first time in 3½ years; deep cut in defense spending key factor (Original Post)
ProSense
Jan 2013
OP
sadbear
(4,340 posts)1. More trickle-down bullshit.
What's good for the wealthy defense contractors is good for everyone else. Fuck'em. That's a part of the economy we can do without.
ProSense
(116,464 posts)3. Exactly!
The GOP/MSM tell us that spending is out of control and needs to be cut. Defense is a good place to cut.
Everyone should be happy.
Cut them some more.
I mean, if people are going to push spending cuts, the bloated defense budget should be top priority.
Arctic Dave
(13,812 posts)2. Someone doesn't want the pork to end. nt
ProSense
(116,464 posts)4. Yeah, and they'll find a few gullibles. n/t
Motown_Johnny
(22,308 posts)5. Caused by Government Spending Cuts.
Government Spending Cuts caused the reduction in growth.
An economic slow down caused by Government Spending Cuts.
There must be 100 ways to phase that.
ProSense
(116,464 posts)6. Maybe Republicans will see the light. n/t
Motown_Johnny
(22,308 posts)7. We can hope, but don't hold your breath. n/t