US GDP grew 0.6%.

The U.S. economy has grown less than expected in the fourth quarter due to reduced consumer spending. If it were not for an increase in exports it is feared that a total stagnation could have occurred.

In this period the Gross domestic product rose at a 0.6 percent annualized rate, and according to John Lonski, chief economist at Moody’s Investors Service “this puts us uncomfortably close to a recession.”

The growth in GDP was seen as disappointing by analysts, as a median estimate showed an expected
0.8 percent increase.

On closer analysis of the GDP breakdown the trade deficit narrowed to an annualized $506.8 billion, adding 0.9 percentage point to GDP.

Without the involvement of an improved export figure the US economy would actually have shrunk by 0.3 annual pace. This ironically is the first slump since 2001, which was the last time the US was in recession.

Consumer confidence at its lowest ebb since 2003, as consumer spending is down 2 percent from the previous quarter.

This coupled with a disorientated job market it is clear that the GDP would not reach expected levels as personal income’s have increased at a 4.1 percent annual pace from October through December, which is lower than the initial estimate of 4.5 percent.

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