Washington, Jan. 31 (Xinhua-ANI): U.S. real gross domestic product (GDP) declined 0.1 percent in the fourth quarter of 2012, the first time that the world's largest economy shrank in about three years, U.S. Commerce Department said on Wednesday.
The contraction was mainly caused by sharp federal government spending cuts and a decline in business inventories, after the economy registered a strong growth of 3.1 percent in the third quarter last year.
Real federal government consumption expenditures and gross investment decreased 15 percent in the fourth quarter, in contrast to an increase of 9.5 percent in the third quarter, the department said in a report.
The change in real private inventories subtracted 1.27 percentage points from the fourth-quarter change in real GDP after adding 0.73 percentage point to the third-quarter change.
Real exports of goods and services dropped 5.7 percent in the fourth quarter, in contrast to an increase of 1.9 percent in the third quarter, which also contributed to the economic contraction, note the report.
Real personal consumption expenditures rose 2.2 percent in the fourth quarter, compared with a gain of 1.6 percent in the third quarter. Personal consumption accounted for about 70 percent of the total economic activity in the world's largest economy.
U.S. economy posted a modest 2.2 percent for the full year in 2012, an acceleration from 1.8 percent in 2011, but slower than 2.4 percent in 2010, said the department. (Xinhua-ANI)