U.S. economy contracts for first time since recession
January 30th, 2013
08:59 AM ET
2 years ago

U.S. economy contracts for first time since recession

New York (CNNMoney) – Uncle Sam cut spending in the fourth quarter of 2012, causing the U.S. economy to contract for the first time in more than three years.

Gross domestic product, the broadest measure of the nation's economic growth, contracted at an annual rate of 0.1% from October to December, the Commerce Department said Wednesday. It was the first quarterly contraction since the second quarter of 2009, amid the Great Recession.

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Filed under: Economy
soundoff (28 Responses)
  1. Just a thought

    It is such a mistake to cut spending until we have near full employment. Let me guess.... the Republicans want us to continue down that path. With Patriotic Citizens Like the Republicans, Who Needs Enemies?

    January 30, 2013 09:09 am at 9:09 am |
  2. Wilson

    This should be no suprise to anyone.

    January 30, 2013 09:11 am at 9:11 am |
  3. Fair is Fair

    Rut-roh.

    January 30, 2013 09:11 am at 9:11 am |
  4. Rudy NYC

    "Uncle Sam cut spending in the fourth quarter of 2012, causing the U.S. economy to contract for the first time in more than three years."
    ----------------
    That can't be right. Conservative economists have been telling us all along that cutting spending would help the economy because it reduce uncertainty and a million other things.

    Has anyone noticed that big dip in the middle of the chart? Guess when that occurred. That was early 2011 when Republicans sent the economy reeling when they had threatened to shut down the government with a Continuing Resolution fight.

    January 30, 2013 09:13 am at 9:13 am |
  5. Facts don't Lie

    of course it's Obama's fault. Impeach him, please.

    January 30, 2013 09:16 am at 9:16 am |
  6. Sheila

    economy "contract" ?? blame the republicans for that. Just think, if robme was elected, it would have been a lot more "contracted" than it is now.

    January 30, 2013 09:24 am at 9:24 am |
  7. Sabrina

    Of course the GDP is going to go down immediately after the Gov. cuts spending. Gov't spending is added into the GDP. This doesn't necessitate an economic downturn though.

    January 30, 2013 09:29 am at 9:29 am |
  8. rs

    Clue it up....Republican faux anger at the economic situation. Yet we see a real cause and effect at work here. Cut federal spending and GDP declines. What does that mean? We still need stimulus to keep the U.S. out of recession. Cut federal spending as the Republicans demand, we will get recession.

    Who are those guys working for?

    January 30, 2013 09:29 am at 9:29 am |
  9. Dominican mama 4 Obama

    Good news.
    The Great Recession. Ha. My husband's hair is going through the Great Recession, what we experienced was a full blown Depression but I guess nobody wanted to depress us by publicly calling it that. I guess.

    January 30, 2013 09:31 am at 9:31 am |
  10. Moose

    Proof again our leadership in D.C. cant get it done hurry blame bush !!!!

    January 30, 2013 09:33 am at 9:33 am |
  11. much thunder.little rain

    the president needs to put his energy on the economy ...seems like all he wants to do is gay issues and guns...

    January 30, 2013 09:34 am at 9:34 am |
  12. sonny chapman

    Oh no ! We're Socialists ! Our Economy depends on Govt. Spending to stay healthy. At least Defense Spending is necessary & useful.

    January 30, 2013 09:45 am at 9:45 am |
  13. Rick McDaniel

    Your headline already has a lie in it.........this was NOT a recession. It was a world wide depression. Any economist will tell you so.

    Secondly, there has been NO recovery at all. It is ongoing. There can be no recovery, while the government increases its debt load. Something else, any economist can tell you.

    It is obvious that the media no longer has, capable people working in the media.

    January 30, 2013 09:53 am at 9:53 am |
  14. Lynda/Minnesota

    Gosh. I can't remember the last time my husband and I spent money on anything of a frivolous nature. Hey, GOPers. Guess this is the new norm, yes? Isn't this what you folks have been screaming about for the past 4 years? Cut spending. (Not too good for the economy though, is it?)

    Ah, well. Thank goodness for job stability in America.

    And my treadmill. A three mile walk a day absolutely helps overcome GOPer trickle down frustration.

    January 30, 2013 10:15 am at 10:15 am |
  15. Fair is Fair

    Rudy NYC

    "Uncle Sam cut spending in the fourth quarter of 2012, causing the U.S. economy to contract for the first time in more than three years."
    ------
    That can't be right. Conservative economists have been telling us all along that cutting spending would help the economy because it reduce uncertainty and a million other things
    -------
    Read the article, Rudy? The lion's share of the contraction was due to a 22% cut in defense spending. That's what the left has been asking for. Sooooo... they got it.

    January 30, 2013 10:18 am at 10:18 am |
  16. jkane sfl the gop national disgrace party will be swept out like the trash they are in2014 ?

    The economic is doing way better then the gop trash was telling everybody during the romney train wreck that I predicted in Nov .wait till the next gop train wreck in the 2014 mid terms . You have to be brain dead or stupid to vote for any of these backwards morons !!!!

    January 30, 2013 10:22 am at 10:22 am |
  17. rs

    More proof that when it comes to the economy, the Republicans AREN'T the answer.

    January 30, 2013 10:23 am at 10:23 am |
  18. Ray E. (Georgia)

    Aw, Humm,
    Just a snapshot of the Economy and Liberal Economics. And a Pre-Curser of things to come. Just today I read that a lot of Big Stores are closing a lot of locations because of what? Weak Economics/Sales. You want to get ahead? There is no free lunch or shortcuts to sucess. Don't believe me? Ask the Bakers at Hostess. I don't make the News, I just report the News.

    January 30, 2013 10:27 am at 10:27 am |
  19. ghostriter

    Fair.....to be fair, democrats have been screaming that just cutting spending would be bad. Regardless of where it was cut.

    You can't scream at the govt to cut jobs and then be surprised when the economy and the unemployment numbers take hits.

    January 30, 2013 10:30 am at 10:30 am |
  20. Facts don't Lie

    @ Rick McDaniel...
    of course when you get the brunt of your news from FoxNews already proven to be the most mis-informed audience on the planet you would feel the way you do and continue to post the mindless drivel that you do. But just think, if Obama were the dictator you always claim he is trying to be you could not post the stuff you do. You think in North Korea or Syria you could blog like this?? LOL

    January 30, 2013 10:30 am at 10:30 am |
  21. Jimbo

    Why not put a $5,000 TAX on every assult weapon & a $1,000 Tax on every ammo clip that holds over 10 rounds. Tax money could be used for victims??

    January 30, 2013 10:31 am at 10:31 am |
  22. Lynda/Minnesota

    "Read the article, Rudy? The lion's share of the contraction was due to a 22% cut in defense spending. That's what the left has been asking for. Sooooo... they got it."

    Fair is Fair, I have to agree that cutting defense spending is never the answer. It is the only real government subsidized program that actually produces jobs. Sad commentary, I know ... but facts are facts. Then again, I'm all for ANY government run progam the increases jobs in America. Apparently America's private sector isn't too keen on job production.

    Ah, how I long for the days of private sector prosperity and wage increases.

    January 30, 2013 10:40 am at 10:40 am |
  23. Fair is Fair

    Ghost – with all due respect, the left has been clamoring for defense spending cuts since.... well, forever. I'm really surprised that they got exactly what they asked for, and the comments here are blaming conservatives and republicans for the consequence.

    January 30, 2013 10:40 am at 10:40 am |
  24. Rudy NYC

    Fair is Fair wrote:

    Read the article, Rudy? The lion's share of the contraction was due to a 22% cut in defense spending. That's what the left has been asking for. Sooooo... they got it.
    ------------------------
    I think much of the contraction had more to do with Hurricane Sandy than anything else. People stopped spending. Most of the article discusses other issues, too. It also mentions the sequestration battle that loomed at the end of the year. The tax rate battle. All of it combined to slow retail spending.

    The article even discusses impact of overseas markets. Please, don't take one line out of the article and wear it like a feather. The article did not discuss the nature of the defense cuts, most of which could be attributed to the scaling down of the wars.

    January 30, 2013 10:40 am at 10:40 am |
  25. rs

    Republicans have concentrated so much of America's wealth at the top (which obviously has not done anything for the vast majority of Americans), they have to know this is precisiely the results of a "cut spending" philosophy. Worse they are too studid to see this is the course most European nations took- and the result was a double-dip recession.

    Of course creating another recession is what the GOP wants- it enables the rich to get- well richer, and at the end of the day, those are the ONLY people the GOP cares about.

    Vote Republican, and you vote against your own best interests.

    January 30, 2013 10:41 am at 10:41 am |
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