The U.S. economy just barely eked out a quarter of growth at the end of last year, according to revised estimates published by the Commerce Department on Thursday morning.
Growth clocked in at only 0.1 percent in the fourth quarter due to a collapse in defense spending and business spending on inventories — but that was nevertheless enough to reverse the 0.1 percent decline in output originally reported by the department and extend the economy’s record of consecutive quarters of positive growth to 14 following the downturn of 2008 and 2009.
The minor revision in the broadest measure of the nation’s economic health has little significance to economists such as Federal Reserve Chairman Ben S. Bernanke, who this week testified that the disappearance of growth originally reported was due primarily to flukes in federal outlays for defense and did not worry the central bank.
But it may take on more significance in the sphere of public opinion, where pundits, bloggers and commentators last month proclaimed that the U.S. was once again on the verge of recession after the department reported the slight dip in growth.
The reading provoked a brighter reaction from economists and social media.
He said the dip in growth at the end of last year, as “painful and pitiful” as it was after a healthy 3.1 percent output gain in the third quarter, actually bodes well for the economy’s performance this year, as growth is sure to rebound.
But other economists and Wall Street traders expressed disappointment, even with the upwardly revised growth number.
“The upward revision to positive was not as impressive as expected,” said Mike Van Dulken, head of research at Accendo Markets. Many Wall Street forecasters had expected a gain of as much as 0.5 percent.
The economy’s performance in the fourth quarter “was terrible,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. But he predicted that the stock market would continue its upward climb nevertheless.
Separately, the U.S. government reported that the number of Americans seeking weekly unemployment benefits fell 22,000 last week to a seasonally adjusted 344,000.
Applications for unemployment have fallen steadily in recent months. The four-week average has declined nearly 11 percent since November. At the same time, employers added an average of 200,000 jobs a month from November through January. That was up from about 150,000 in the previous three months.
The overall U.S. jobless rate stands at 7.9 percent. The next report is due out next week.
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