Slow US economic growth in Q4 may hide strength

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Associated Press

Posted on January 30, 2013 at 3:02 AM

WASHINGTON (AP) — The Commerce Department releases a snapshot of fourth quarter economic growth Wednesday morning, and most economists are saying it's not going to look very good.

The consensus forecast from Factset is that economic growth slowed sharply from October through December to an annual rate of 1.2 percent. That's down from a 3.1 percent rate in the third quarter and would be the slowest in nearly two years.

Economists also expect growth to remain sluggish at the start of the year as Americans come to grips with an increase in Social Security taxes that has left them with less take-home pay.

But economists say a number of one-time factors may account for sluggish fourth quarter numbers and the Commerce Department report may highlight underlying strengths that could propel the economy in the second half of 2013. Those include faster growth in consumer spending and the seventh straight quarter in which housing contributed to economic growth. It may also show businesses invested more in equipment and software.

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APPHOTO NYBZ202: In this Wed. Dec. 5, 2012, photo, containers are unloaded from cargo ships at the Port of Los Angeles. Most economists agree that the snapshot of U.S. economic growth released Wednesday, Jan. 30, 2012, is going to look dismal. (AP Photo/Nick Ut) (5 Dec 2012)

<<APPHOTO NYBZ202 (12/05/12)>>

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