The United States economy shrank by 0.1% in the last three months of 2012 according to official statistics released on Wednesday by the United States Department of Commerce. The contraction in the economy comes after growth of 3.1% in the previous quarter (July to September) and is the first contraction since the 2009 recession. 
Economic growth is thought to have fallen due to cuts in government spending, including a 22% cut in the defence budget being the largest decline in defence spending since 1972. Economic analysts had expected a 1.1% in growth according to polling conducted by the news agency Reuters and that none of them had predicted a contraction in the economy.
Export levels were at their lowest for almost four years, this may be due to the recession in Europe and a decline in growth in China. However, there were increases in consumer spending and investments which shows that there may be other problems with the economy and that the "fiscal cliff" issues of December did not worry markets too much.

Have an opinion on this story? Share it!
Share this: 






This page is archived, and is no longer publicly editable.
Got a correction? Add the template {{editprotected}} to the talk page along with your corrections, and it will be brought to the attention of the administrators.
Please note that due to our archival policy, we will not alter or update the content of articles that are archived, but will only accept requests to make grammatical and formatting corrections.
Note that some listed sources or external links may no longer be available online due to age.
Got a correction? Add the template {{editprotected}} to the talk page along with your corrections, and it will be brought to the attention of the administrators.
Please note that due to our archival policy, we will not alter or update the content of articles that are archived, but will only accept requests to make grammatical and formatting corrections.
United States economy shrinks by 0.1% in last quarter of 2012