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Surprise: U.S. economy shrinks for first time in near four years
More bad financial news has hit the nation, as the Commerce Department reports the U.S. economy has shrunk for the first time in three-and-a-half years, by 0.1 percent in the fourth quarter.
By way of comparison, the third quarter, from July-September, saw a 3.1 percent growth rate, according to The Associated Press.
Analysts say the sluggishness is due to defense cuts — the biggest to hit the military in 40 years, according to AP. Another factor: Exports have fallen.
Hiring remains slow. Job creation has stumbled at an estimated 150,000 new positions per month for the past couple years — barely enough to make a dent in the unemployment rate, which has held at a stubborn 7.8 percent for months, the AP reports. And economic forecasts are for more of the same: Analysts predict another high jobless rate for the month. The next jobs report is due for release this Friday.
The contraction is reportedly a surprise and fuels talk that President Obama's tax increases may further weaken the economy.
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About the Author
Cheryl Chumley is a continuous news writer for The Washington Times. Previously, she was part of the start-up team for The Washington Times’ digital aggregation product, Times247. She’s also a 2008-2009 Robert Novak journalism fellow with The Phillips Foundation. She can be reached at email@example.com.
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