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Thursday, January 31, 2013

GDP unexpectedly shrinks, decline seen temporary

We all see what we want to see in economic reports.  That's why I rely on the message of the market rather than opinion for vision.  The message, repeated for decades in the US, has been one of increasing personal consumption in the United States.  While consumption drives the economy today,  it cannot replace investment as the driver of tomorrow's.

Chart:   Personal Consumption Expenditures (PCE) As A %GDP and Personal Consumption Expenditures As A %GDP Average from 1947

Headline:  GDP unexpectedly shrinks, decline seen temporary

WASHINGTON (Reuters) - The economy unexpectedly contracted in the fourth quarter, but analysts said there was no reason for panic given that consumer spending and business investment picked up.

Gross domestic product fell at a 0.1 percent annual rate, its weakest performance since the economy emerged from recession in 2009, the Commerce Department said on Wednesday.

Source: more


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