How the US economy shrank, at a glance

AP News
Posted: Jan 30, 2013 5:14 PM

The U.S. economy shrank in the October-December quarter for the first time in 3½ years, hurt by a sharp cut in defense spending, fewer exports and sluggish growth in company stockpiles.

The decline, at an annual rate of 0.1 percent, marked a sharp slowdown from the 3.1 percent annual growth rate in the July-September quarter.

The drop in gross domestic product wasn't as bleak as it looked. The weakness was mainly the result of one-time factors. Consumer spending and business investment, two pillars of growth, strengthened.

Here are the contributions made by the largest sectors of the economy in the fourth quarter:

Percentage-point effect on economic growth
Consumer spending +1.52
Business investment +0.83
Home construction +0.36
Company stockpiling -1.27
Government spending -1.33
Change in trade deficit -0.25
Source: Bureau of Economic Analysis