The U.S. economy shrank slightly in the last three months of 2012, due
to cuts in government spending and slowing exports.
Wednesday's report from the Commerce Department says the economy shrank
at a one-tenth of one percent annual rate in the fourth quarter. That is
the worst performance since 2009, during the recession.
The decline is a sharp slowdown from the more than three percent annual
growth rate in the prior quarter.
This
latest report came as U.S. consumers cope with higher taxes and
Washington is considering further spending cuts.
Exports have been hurt by a recession in Europe, which cut demand for
U.S.-made goods.
Growth was also hurt when businesses cut their stockpiles as managers
worried they might not be able to sell all of their goods.
Not all the news was bad. The report said overall growth for 2012 was
2.2 percent, a bit better than the prior year.
