U.S. GDP contracts for first time since 2009

U.S. GDP contracts for first time since 2009

Economy shrinks for first time since recession ends

U.S. GDP Contracts for First Time Since 2009

The U.S. economy unexpectedly contracted in the fourth quarter, suffering its first decline since the 2007-09 recession as businesses scaled back on restocking and government spending plunged.

Gross domestic product fell at a 0.1 percent annual rate after growing at a 3.1 percent clip in the third quarter, the Commerce Department said on Wednesday.

That was the worst performance since the second quarter of 2009, when the recession ended, and showed the economy entering the new year with no momentum.

The contraction, coming against a backdrop of tightening fiscal policy, could spur fears of a new recession and create an urgency for policymakers to deal with outstanding budget issues.

Economists polled by Reuters had expected output to increase at a 1.1 percent rate.

None of the economists surveyed had predicted a contraction.

Read more…

Want more? Get stories like this delivered straight to your inbox.

Thank you, we'll keep you informed!