US GDP – 4th Quarter 2012

January 30, 2013 in U.S.

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Markets were taken aback by a shock contraction in the U.S. GDP during the fourth quarter of 2012. Gross Domestic Product (GDP) fell by 0.1% year-on-year against the consensus expectation of a growth of 1.1%.

Economists were concerned that the result represented the weakest rate of growth in the GDP since 2009, even though it was driven primarily by a huge cut-back on defence expenditure, inventory de-growth and the result of the Superstorm Sandy.

On a bright note, consumer spending rose by 2.2% and business investment bounced back within the context of slower inflation. Homebuilding grew 15.3%.

All taken, economists view the report as a matter of concern, but are encouraged that the basic fundamentals of the economy are on track to produce a pipeline of growth during 2013.

 

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Saul Griffith is an investor and trader in stocks, commodities and forex, writing under a pen name. Saul has professional accounting qualifications and extensive experience in industry and the financial markets. He also has an abiding interest in breaking news that could be a harbinger of new trends and give insight into an instrument’s potential for providing value, growth or yield. Additionally, he keeps abreast of technology and political developments – in his opinion these are areas which could help shape global recovery from the current turmoil. Connect the author on Google: +Saul Griffith.

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