U.S. Economy Contracted In Q4 Of 2012
The U.S. Commerce Department has just released data showing that the American economy shrank by 0.1 percent in the fourth quarter of 2012. This data is seen as a shocking development, particularly after the claimed growth in GDP of 3.1 percent in Q3 of 2012. The miserable data for Q4 of last year marks the first contraction in GDP of the U.S. economy since the last recession of 2008-2009.
The commentators are already trying to spin the Q4 data, attributing it to, among other things, reduction in inventories and reduced military spending by the Pentagon. However, spin aside, it is clear that nearly five years after the supposed end of the last recession, the U.S. economy is still on life support, depending on a trillion dollars every year in deficit spending to remain afloat, and create artificial “growth” in GDP. Now, despite the massive borrowing binge by the U.S. government and its policymakers, even tepid growth cannot be assured. At best, the American economy is at stall speed, and with increased talk by politicians in Washington of fiscal consolidation and austerity, the worst may be yet to come.