The economy in the US shrank to -0.1 in 4th qrt. of 2012

[jamesbond]

"The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.

The 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 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.

The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts.

Still, the weakness may be because of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.

And those volatile categories offset faster growth in consumer spending, business investment and housing -- the economy's core drivers of growth.

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.

The economy may stay weak at the start of the year because Americans are coming to grips with an increase in Social Security taxes that has left them with less take-home pay.

Subpar growth has held back hiring. 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.

Economists forecast that unemployment stayed at the still-high rate again this month. The government releases the January jobs report Friday.

The slower growth in stockpiles comes after a big jump in the third quarter. Companies frequently cut back on inventories if they anticipate a slowdown in sales. Slower inventory growth means factories likely produced less.

Heavy equipment maker Caterpillar, Inc. said this week that it reduced its inventories by $2 billion in the fourth quarter as global sales declined from a year earlier.

The biggest question going forward is how consumers react to the expiration of a Social Security tax cut. Congress and the White House allowed the temporary tax cut to expire in January, but reached a deal to keep income taxes from rising on most Americans.

The tax increase will lower take home pay this year by about 2 percent. That means a household earning $50,000 a year will have about $1,000 less to spend. A household with two high-paid workers will have up to $4,500 less.

Already, a key measure of consumer confidence plummeted this month after Americans noticed the reduction in their paychecks, the Conference Board reported Tuesday."

Read the full story here: http://www.cnbc.com/id/100419252

The scary thing is, if you have two consecutive quarters with negative growth, the economy is then in a recession. Let's see what the GDP is after the first quarter of 2013.

This is the slowest recovery after a recession since the great depression. It's incredible how slow this economy is. The housing market is still in the toilet (even though mortgage rates are at an all-time low). The unemployment rate has been 7.8% or higher since January of 2009 (four years now).

50% of college graduates are either unemployed, or underemployed! This economy is really horrible and has been since the economic collapse in the fall of 2008.

[Jester]

It's the Republicans fault!

[Ghost]

...

[fightforlove]

Obama is now saying that good employment and manufacturing jobs are coming back to the US. How does he intend to do this? He has done little to address the trade regulation issues with China and has not implemented any policy that will re-industrialize the nation. There are new technologies to go after: medicine, nuclear energy, green energy... He should take the medical device tax out of his health care program and get serious about actually helping/growing nuclear/green/alternative energy industries into the mainstream rather than just slapping them with more regulations to please the environmental nazis.

[gsjackson]

Obama is now saying that good employment and manufacturing jobs are coming back to the US. How does he intend to do this?

The administration has said that they intend to do this by "killing the dollar," in order to make our exports more attractive. Bad news for those of us who want to go abroad and spend dollars.

[OutWest]

Obama is now saying that good employment and manufacturing jobs are coming back to the US. How does he intend to do this?

The administration has said that they intend to do this by "killing the dollar," in order to make our exports more attractive. Bad news for those of us who want to go abroad and spend dollars.

Part of that "Killing the dollar" will be to pauperize the US working population so they are cheap working serfs...
Obama is quite cooperative with the large anti-free enterprise corporations, but life will only become more difficult
for small business owners which are the largest source of employment and innovation in the US economy.

Obama is the Chicago manifestation of the criminal gang that has been running things for a long time...

but no problem, Americans re-elected him anyway...

"Give the people what they want...good and hard!"


Outwest

BTW...your observations about Tucson are spot on...I think the area is an excellent bet.

[gsjackson]

Obama is now saying that good employment and manufacturing jobs are coming back to the US. How does he intend to do this?

The administration has said that they intend to do this by "killing the dollar," in order to make our exports more attractive. Bad news for those of us who want to go abroad and spend dollars.

Part of that "Killing the dollar" will be to pauperize the US working population so they are cheap working serfs...
Obama is quite cooperative with the large anti-free enterprise corporations, but life will only become more difficult
for small business owners which are the largest source of employment and innovation in the US economy.

Obama is the Chicago manifestation of the criminal gang that has been running things for a long time...

but no problem, Americans re-elected him anyway...

"Give the people what they want...good and hard!"


Outwest

BTW...your observations about Tucson are spot on...I think the area is an excellent bet.

+1. Washington keeps coming up with wrong answers, and I think deliberately so. Obama is just business as usual.

Tucson has lost its '80s and '90s luster, especially relative to the Phoenix area, and I'm not really sure why. It's a relatively low income city, and has gotten a little shabby in parts, but it still has beautiful country, great weather, great sports, and yeah, I think it probably is the best value in real estate out there right now, from what I've seen.

[Ghost]

...

[OutWest]

Well, well, I sure am glad Obama gave that reassuring SOTU. And I was worried for a moment about such things as peak oil, dollar collapse, more destructive (at home and abroad) wars, and loss of freedoms! But thankfully, Mr. O assured of his abilities to shit rainbows and vomit butterflies! So everything is going to be just fine! We're going to restore the U.S. economy and restore the middle class! We're going to bring back manufacturing! We're going to end violence by eliminating firearms!

I have come to the conclusion that supporters of Mr. O believe, since I watched the SOTU, that applauding his speeches makes his ideas work even though he offers no backing whatsoever. Just clap if you believe folks. Nothing to see here. Move along. Bend over and practice shitting rainbows. Just ignore that giant cock being shoved up your collective asses.

Oh come one...would Santa really do that to you? Ya really mean Santa will slip you the salami after shitting those rainbows?