The US economy unexpectedly contracted in the fourth quarter of last year.
But the experts say don’t panic – as consumer spending and business investment picked up.
They also point out that much of the decline was due to a plunge in government spending, particularly on defence, and businesses scaling back on restocking, that is letting their inventories fall.
Take those factors out and the US economy would have grown at a respectable 2.5 percent rate.
Gross domestic product declined at a 0.1 percent annual rate, by contrast in the previous quarter it grew by 3.1 percent.
Policymakers – like those at the US central bank, the Federal Reserve who have just completed their two-day policy meeting – did not seem too concerned and said the stall in growth was likely to be only temporary.
They also blamed weather related disruptions, a reference to super storm Sandy.
Fed Chairman Ben Bernanke and his colleagues left in place their 85 billion dollar a month bond buying stimulus plans.
The improvement in consumer spending in the fourth quarter means businesses will now have to replenish their stocks, which should help lift growth in the early part of this year.
In addition the jobs market seems to be improving. Private employers stepped up hiring in January, though still not to the level that the Federal Reserve has said is needed for it to end stimulus measures.
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2International breaking news | euronews online world breaking news in video
- 3Caught red-handed: the Russian Major fighting in Ukraine
- 4Video footage shows massive explosion in Tianjin, China
- 5Ukraine puts top Russian general Gerasimov on ‘most wanted’ list
- 6Why World Elephant Day matters
- 7Momentum for Mars: Astronauts say mission is inevitable
- 8Latest News Bulletin
- 9Who came out top in the US Republican television debate?
- 10UK: at least 7 dead after plane crashes into road in Brighton
- 11Snowden, Assange and Manning statues unveiled in Berlin
- 12Virginia:TV journalist and cameraman shot dead live on air
- 13ISIL militant group claims to have killed Croatian hostage in Egypt
- 14Earth Overshoot Day…Pushing Mother Nature too far
- 15Windows 10, three weeks on: the good, the bad and the ugly
- 16International news | euronews, latest international news
- 17Bringing the trolls out of the dark: Russian ‘troll’ awarded 1 rouble damages
- 18As ‘Daily Show’ Jon Stewart’s tenure ends, scholars say goodbye to their research topic
- 19European Union News | euronews: latest breaking news and headlines about European Union
- 20Scientists find sinkhole cave under Mexico’s Kukulkan Castle Pyramid
Wires > Business
- 15:02 CET Outage cuts North Morecambe gas sub-terminal flows to zero
- 14:49 CET China stock probes send shivers through investment community
- 13:05 CET UK shares head for worst one-day fall in over a week
- 13:01 CET Ireland to raise growth forecast, appoint central bank head soon -…
- 12:58 CET BG puts its Thai gas field stake worth $1.2 billion on sale -…
- 12:57 CET Insulin infusion device maker CeQur raises $100 million
- 12:46 CET U.S. law firm targets Google foes for private damages claims
- 12:11 CET IMF’s Lagarde sees weaker than expected global economic growth