Unexpected GDP drop comes as defense spending slumps
(NEWSER) – As "firsts" go, this is an unfortunate one: The US economy contracted in Q4, marking the first time it has done so since the recession ended. The AP reports that the biggest cut in defense spending in four decades, reduced exports, and sluggish growth in company stockpiles contributed to the unexpected decline in GDP, which dropped at a 0.1% annual rate between October and December. Whether it's a harbinger of doom (raising fears the economy won't be able to handle new tax increases now in effect) or a one-off remains to be seen, notes the AP.
Read more: Newser
