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Economy Shrank 0.1% in the 4th Quarter

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Posted

Analysts were not expecting this. Not good.

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Posted

Analysts trying to put a positive spin on it, though.

WASHINGTON (AP) -- The U.S. 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 decline occurred despite faster growth in 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's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter and the first contraction since the second quarter of 2009.

Economists said the surprise decrease in the nation's gross domestic product wasn't as bad as it looked. The weakness was primarily the result of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.

Those volatile categories offset a 2.2 percent increase in consumer spending, up from only 1.6 percent in the previous quarter. And business spending on equipment and software rose after shrinking over the summer.

"Frankly, this is the best-looking contraction in U.S. GDP you'll ever see," Paul Ashworth, an economist at Capital Economics, said in a note to clients. "The drag from defense spending and inventories is a one-off. The rest of the report is all encouraging."

http://finance.yahoo.com/news/us-economy-shrinks-0-1-133115372.html

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Posted

Then Analysts are stupid..with all the unknowns for business owners concerning Medical benefits, Taxes and such no one was growing much in Q4. It honestly felt like 2008 without the public layoffs...quiet ones are happening as my organization just let go of 500 people.

As a Member in IT sales I even received an official letter from a potential customer saying they will unfortunately going to do any new business agreements for the next year bc of the new Healthcare rules- taxes and have to sort out the next financial plan after doing so... it affected my pocketbook.

I target the medical vertical and independent successful doctor's offices and clinics have very little profit with the new regulations and mandatory medical records revamp...its been a little depressing listening to businesses struggle. Even more that I cannot get the commission im used to recently as well.

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Posted

I'm pretty concerned, I work in the construction/design industry and work is starting to dry up again.

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Posted

Still need to add jobs. We need workers to be able to be buyers and spenders.

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Posted

Medical industry taking a huge hit thanks to Obamacare (reimbursment changes), hits to company provided healthcare plans, and tax increases.

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Posted

This pushes the debt to GDP ratio up to 103.8% to end 2012.

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Posted

This was caused by a decrease in defense spending. It's a non-story.

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Posted

This was caused by a decrease in defense spending. It's a non-story.

Sequestering hasn't even taken place yet. Article concerning Marine layoffs were just announced the other day and haven't happened yet.

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Posted

This was caused by a decrease in defense spending. It's a non-story.

But as a whole the government spent $908 billion in Q4, compared to $877 billion in Q3.

http://www.fms.treas.gov/mts/mts1212.pdf

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Posted

Still need to add jobs. We need workers to be able to be buyers and spenders.

Sure, it is just not that simplistic. Obama would love to pull the "jobs lever" and make jobs happen but this is a workforce skill vs dynamic shifts in automation and technology.

The middle class jobs, that are not tech related are not being replaced.

We are living in a new time and I chuckle when I go through my back teller and she asks me" Have you been to our online banking? Because you could have done this online"

Do you just realize you just directed me to a way of banking that will eliminate your job? I was driving by and wanted human interaction!

Here is a decent article about this.

http://www.seattlepi...obs-4223740.php

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