US Economy's First Negative Growth In More Than 3 Years

US government released the four quarter of 2012 Gross domestic product (GDP) report shows that the US economy is shrinking by 0.1%. This is the first time that the US economy has been in negative growth since the last economic crisis in the two quarter of 2009. In addition, the economic contraction at the end of last year was totally out of line with market expectations.

Reuters pointed out that the 0.1% decline in the US economy is mainly due to a slowdown in the pace of replenishment of enterprises and a sharp decline in government spending. The US Department of Commerce said that the 0.1% decline was annualized rate of change, which was 3.1% in the three quarter of last year.

The performance of economic -0.1% was the worst since the two quarter of 2009, when the recession officially ended in 2009. Negative growth means that the US economy has lost the momentum of growth at the 2013 new year.

The fourth quarter economic contraction of 0.1% may trigger the market's fear of a new recession in the United States. This situation also occurs in the context of tight fiscal policy. economic policy The makers issued an alert urging them to solve the outstanding budget problem as soon as possible.

According to a survey by Thomson Reuters, economists expect the median growth rate of GDP in the four quarter to grow by 1.1%. It should be pointed out that no economist expected the US economy to decline.

However, the rise in consumer spending and the rebound in corporate investment have limited the larger economic downturn and also brought hope for the future recovery of the economy. As Washington is preparing for the national belt, the recovery of the US economy will face serious challenges.

While the GDP data is released, the Federal Reserve is holding a two day policy meeting. The latest GDP report is likely to provide central bank officials with more ammunition to maintain super easing policy.

Most economists believe that the economy must maintain more than 3% growth over a long period of time to significantly reduce the high unemployment rate. Over the past few years, the US economy has only been able to maintain its pace of over 2%. The growth rate of the US economy in 2012 was 2.2%.

It should be noted that in the fourth quarter of last year, the US economy was hit by the huge storm at the end of 10. Hurricane Sandy caused serious damage to the east coast of the United States. It is estimated that it will lead to a 0.5 percentage point reduction in the rate of change of GDP in the fourth quarter.

In addition, the US economy has to face the uncertainty of the so-called fiscal cliff, that is, the automatic start up of taxes and the reduction of government budgets under certain conditions. This factor has hurt the confidence of families and enterprises, although data show that this kind of injury has basically subsided.

　　 Some points of GDP Report

In the fourth quarter of last year, the pace of inventory replenish slowed, and they increased too much inventory in the three quarter. Slower growth in inventories has led to a 1.27 percentage point reduction in the growth rate of GDP in the fourth quarter. Such a big negative impact has hit the most in the past two years. Excluding inventory, the US economy will grow by 1.1% in the fourth quarter of last year, still significantly slower than the corresponding increase in the three quarter of last year, 2.4%.

The proportion of government spending in the fourth quarter of last year dropped by 6.6%, with defence spending plummeted by 22.2%. The previous three quarter's growth has been swept away. Government spending cuts led to a 1.33 percentage point decline in the GDP growth rate in the fourth quarter of last year, while defense spending fell the most since 1972.

Weak exports also suppressed economic growth. The fourth quarter of last year's exports fell for the first time since the first quarter of 2009. US exports have been affected by European recession, slowing economic growth in China, and the suspension of ports related to storms and strikes. The trade deficit has led to a 1 percentage point reduction in the growth rate of GDP in the fourth quarter.

However, there are some highlights in the GDP report released today. More importantly, consumer and business spending showed a strong trend. Household income after tax and inflation increased significantly in the fourth quarter.

Consumer spending rose 2.2% in the fourth quarter of last year, or 1.6% of the previous three quarter. Consumer spending American economy It accounts for about 2/3 of the total. Corporate investment began to rebound, and the first three quarters of this year fell for the first time in 1 and a half years. The real estate market is another highlight of today's GDP report. The volume of housing construction has increased by 15.3%, and has increased further on the basis of a 13.5% rise in the three quarter. In addition, the housing industry contributed to last year's economic growth rather than the negative impact, the first since 2005.