United States: GDP unexpectedly falls in Q4
January 30, 2013
In the fourth quarter, GDP contracted at a seasonally adjusted annualised rate (saar) of 0.1%, according to the advance estimate released by the Bureau of Economic Analysis (BEA) on 30 January. The negative print contrasted both the 3.1% expansion seen in the previous quarter and market expectations, which had anticipated that growth would reach 1.0%. The negative reading reflects, in part, the impact of Hurricane Sandy, which hit the East Coast of the United States in late October.
On the domestic side, the deceleration was the result of slower inventory building as well as of a sharp decline in government spending, which swung from a 3.9% annualized expansion in Q3 to a 6.6% contraction in Q4, amid a massive contraction in defence spending. On the other hand, personal consumption expenditures accelerated to a 2.2% expansion (Q3 2012: +1.6% quarter-on-quarter saar) while fixed investment picked up to a robust 9.7% increase (Q3: +0.9% qoq saar) amid strong growth in non-residential fixed investment (Q3: -1.8% qoq saar; Q4: +8.4% qoq saar).
The external side of the economy also contributed to the decline, as exports posted a sharp 5.7% contraction in Q4, which contrasted the 1.9% expansion recorded in the preceding quarter. Meanwhile, imports decreased a milder 3.2% (Q3: -0.6% qoq saar), prompting the external sector's net contribution to overall growth to step down from a 0.4 percentage-point contribution in Q3 to a virtually flat contribution in Q4.