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Wednesday, January 30, 2013

U.S. Economy Shrinks 0.1%

The U.S. economy shrank from October through December for the first time since the recession ended.  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. The weakness was primarily the result of one-time factors.

Another positive aspect of the report: For all of 2012, the economy expanded 2.2 percent, better than 2011’s growth of 1.8 percent.

Exports fell by the most in nearly four years, likely a result of Europe’s recession and slower growth in China and some other large developing countries.

The economy has created about 150,000 jobs a month, on average, for the past two years. That’s barely enough to reduce the unemployment rate, which has been 7.8 percent for the past two months.(Wash Post, 1/30/2013)

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