Market Review, January 2013

Publication Date: 

February 2013


The U.S. economy contracted for the first time since the second quarter of 2009, surprising most market commentators who had forecasted a modest increase. According to the advance estimate, the fourth quarter real GDP was -0.1%, less than the consensus estimate of +1.6% and significantly lower than the third quarter growth of +3.1%. The decrease in fourth quarter real GDP primarily reflected negative contributions from government spending (-1.33%) - especially in defense, which reversed its prior quarter surge of private inventory investment (-1.27%) and net exports (-0.25%). These factors were offset by positive contributions from personal consumption expenditure, non-residential fixed investment and residential fixed investment.