u.s. economy shrinks most since 1982 ...

U.S. Economy Shrank 3.8% in Fourth Quarter, Most Since 1982

By Timothy R. Homan

Jan. 30 (Bloomberg) -- The U.S. economy shrank less than forecast in the fourth quarter as a collapse in spending led to a buildup in inventories that will cause companies to retrench even more in the early part of this year.

Gross domestic product contracted at a 3.8 percent annual pace from October through December, the most since 1982, the Commerce Department said today in Washington. A gain in stockpiles contributed 1.3 percentage points to growth, partially compensating for a back-to-back drop in consumer spending. Prices also retreated.

The economy is likely to contract further in the first three months of this year as retailers and manufacturers, from Starbucks Corp. to Boeing Co., this week announced plans to slash payrolls and cut production to get rid of unwanted stocks. Today's report will maintain the pressure on President Barack Obama to win quick congressional approval of a fiscal stimulus package.

``We're in the middle of a sharp contraction in the economy,'' Dean Maki, co-head of economic research at Barclays Capital Inc. in New York, said before the report. ``Businesses are cutting spending in all areas, whether it's employees or investment spending.''

Full article at

http://www.bloomberg.com/apps/news?pid=20601087&sid=aN1OnWuR4C4k&refer=home

My comment:

This GDP figure for the December quarter is a joke in my opinion, as is just about every official US figure. What an absurdity that increasing stockpiles contributed 1.3 percentage points to growth!

Because increasing stockpiles is a symptom of the weakness of the US economy with a stock market crash in the quarter and consumers cutting back on spending which means stockpiles increased!