The US economy unexpectedly contracted in the fourth quarter of 2012, the Commerce Department reported today, according to the New York Times.
The nation’s gross domestic product, the broad measure of all goods and services produced by the economy, decreased at an annual rate of 0.1 percent, the Wall Street Journal reported. Economists polled by Dow Jones Newswires had been expecting 1.0 percent annualized growth.
More from GlobalPost: US economy grew at rate of 2% in third quarter
It’s the first time GDP has shrunk in three and a half years, or since the post-recession recovery began, the Wall Street Journal reported.
Financial experts said a sharp decrease in federal spending, along with fewer exports and private businesses declining to build up their inventories, was behind the GDP’s slide, the New York Times reported.
The drop in federal spending of 15 percent was the largest decrease since 1973, the Wall Street Journal reported.
“I’m a little surprised,” Michael Feroli, chief United States economist at JPMorgan, told the New York Times. He noted the drags on the economy overwhelmed some positive indicators in the fourth quarter, including a rise in final sales to private domestic purchasers of 2.8 percent.
For all of 2012, the economy grew by 2.2 percent, the Wall Street Journal reported.
According to the New York Times:
This was the Commerce Department’s first estimate of fourth-quarter growth; revisions are due in February and March, so the final figure could go up or down significantly.