US economy contracts, first time in 3 years

The US economy contracted in the fourth quarter of 2012 amid the biggest plunge in defence spending in four decades.

30th January, 2013
US economy contracts

The US economy contracted in the fourth quarter of 2012 amid the biggest plunge in defence spending in four decades.

Gross domestic product shrank by 0.1 per cent in the quarter, the US Commerce Department said in an estimate; this is the worst performance since the second quarter of 2009.

That was despite an acceleration in consumer spending amid a drop in fuel prices and the biggest gain in incomes in four years.

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