Slow US Economic Growth In Q4 May Hide Strength
By CHRISTOPHER S. RUGABER
WASHINGTON (AP) â¿¿ Most economists agree that Wednesday's snapshot of U.S. economic growth is going to look dismal.
The consensus forecast from Factset is economic growth slowed sharply from October through December to an annual rate of 1.2 percent. That's down from a 3.1 percent rate in the July-September quarter and would be the slowest in nearly two years.
Growth will probably remain sluggish at the start of the year because Americans are coming to grips with an increase in Social Security taxes that has left them with less take-home pay.But economists are cautioning that the Commerce Department report may also highlight underlying strengths that could propel the economy in the second half of 2013. "This is not as bad as it looks," said Nigel Gault, an economist at IHS Global Insight, who is forecasting a measly 0.3 percent expansion in the fourth quarter. A key reason economists are not too worried is the weakness was probably the result of a number of one-time factors: slower growth in stockpiles, less government spending and a wider trade gap. Those factors likely offset faster growth in consumer spending and the seventh straight quarter in which housing contributed to economic growth. Businesses may even have invested more in equipment and software. Overall, the economy probably expanded at a roughly 2 percent annual rate in the second half of 2012 â¿¿ about the same modest growth that has occurred since the recession ended three and a half years ago. The subpar growth has held back hiring. The economy has created about 150,000 jobs a month, on average, for the past two years. That's barely enough to reduce the unemployment rate, which has been 7.8 percent for the past two months. Economists forecast that unemployment stayed at the still-high rate again this month. The government releases the January jobs report Friday.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV