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U.S. Economy Unexpectedly Contracts in Fourth Quarter

Wall Street Journal (01/30/12) Eric Morath; Sarah Portlock; Kathleen Madigan

The U.S. gross domestic product shrank for the first time in three and a half years in the fourth quarter of 2012, according to the U.S. Department of Commerce. GDP declined at an annual rate of 0.1% in the fourth quarter as companies pared back their inventories, government spending declined by 15%, and the fiscal cliff discussions dragged on. Hurricane Sandy and a drought in the Midwest also took a toll on the economy. Economists polled by Dow Jones Newswires had anticipated annualized growth of 1.0% for the quarter. Still, GDP rose 2.2% for the year, up from 1.8% growth in 2011.