Friday, August 1, 2014
YOLO COUNTY NEWS
99 CENTS

Economy expands at 0.4 percent rate

By
From page A2 | March 28, 2013 |

WASHINGTON (AP) — The U.S. economy grew at a slightly faster but still anemic rate at the end of last year. However, there is hope that growth accelerated in early 2013 despite higher taxes and cuts in government spending.

The economy grew at an annual rate of 0.4 percent in the October-December quarter, the Commerce Department said Thursday. That was slightly better than the previous estimate of 0.1 percent growth. The revision reflected stronger business investment and export sales.

Analysts think the economy is growing at a rate of around 2.5 percent in the current January-March quarter, which ends this week.

Steady hiring has kept consumers spending this year. And a rebound in company stockpiling, further gains in housing and more business spending also likely drove faster growth in the first quarter.

The 0.4 percent growth rate for the gross domestic product, the economy’s total output of goods and services, was the weakest quarterly performance in almost two years and followed a much faster 3.1 percent increase in the third quarter. The fourth quarter was hurt by the sharpest fall in defense spending in 40 years.

For all of 2012, the economy grew 2.2 percent after a 1.8 percent increase in 2011 and a 2.4 percent advance in 2010. Since the recession ended in mid-2009, the economy has been expanding at sub-par rates as a string of problems from higher gas prices to Europe’s debt crisis have acted as a drag on the U.S. economy.

Growth appears to be strengthening this year even after taxes increased on Jan. 1 and automatic government spending cuts totaling $85 billion started to take effect on March 1. The Congressional Budget Office has estimated that the combination of tax increases and spending cuts could trim economic growth this year by about 1.5 percentage points. The CBO is predicting just 1.5 percent growth for 2013.

But so far, the economy is showing signs of holding its own against the fiscal drag.

Employers have added an average of 200,000 jobs a month since November. That helped lower the unemployment rate in February to 7.7 percent, a four-year low.

Economists expect similar job gains in March, in part because a measure of unemployment benefit applications fell this month to a five-year low.

Sales of previously occupied homes rose in February to the highest level in nearly three years, while builders broke ground on more houses and apartments. Annual home prices jumped in January by the most since June 2006, according to a closely watched measure.

Stock prices have surged. On Wednesday, the Standard & Poor’s 500 index was within two points of its all-time high.

All of that is making consumers feel wealthier, which could lead to more spending. Consumer spending drives 70 percent of economic activity.

The Federal Reserve still thinks the economy needs aggressive measures to bolster growth. Last week it stood by its plan to keep a key short-term interest rate near zero until unemployment drops below 6.5 percent. The Fed also left unchanged its plan to keep buying $85 billion in bonds until it sees a substantial improvement in the job market.

The slowdown in business inventories trimmed 1.5 percentage point from growth in the fourth quarter and the reductions in defense spending cut another 1.3 percentage point from growth.

Consumer spending was growing at a 1.8 percent rate in the fourth quarter, slightly better than the 1.6 percent increase in the third quarter but down from last month’s estimate that consumer spending was growing by 2.1 percent.

That revision was offset by upward revisions in business investment spending on structures and equipment and by stronger sales of U.S. exports.

The government first estimated two months ago that the economy had contracted at an annual rate of 0.1 percent in the fourth quarter, a decline that was erased by the revisions.

The government will release its first look at first quarter growth on April 26.

————

By Martin Crutsinger, AP economics writer

Comments

comments

The Associated Press

.

News

What’s the buzz?

By Enterprise staff | From Page: A1

 
Davis Reads book project focuses on veterans

By Anne Ternus-Bellamy | From Page: A1

Carbahal and Company celebrates 30 years

By Special to The Enterprise | From Page: A1

 
UCD chancellor is coming up for five-year review

By Tanya Perez | From Page: A1 | Gallery

A week of groundwater news in the Year of Groundwater

By Elizabeth Case | From Page: A1 | Gallery

 
Candidate goes homeless to showcase economic gap

By The Associated Press | From Page: A2

 
Increase in health plan costs is slowing

By The Associated Press | From Page: A2

Kashkari’s campaign coffers depleted

By The Associated Press | From Page: A2

 
Parents can learn all about IEPs

By Enterprise staff | From Page: A3

10 essential herbs are focus of Davisite’s talk

By Enterprise staff | From Page: A3

 
Bee beard photo wins award

By Enterprise staff | From Page: A3 | Gallery

Need a new best friend?

By Enterprise staff | From Page: A3 | Gallery

 
Businesses can learn about PR strategies

By Enterprise staff | From Page: A3

Enjoy films, beer at benefit Friday night

By Enterprise staff | From Page: A3

 
Target hosts National Night Out celebration

By Enterprise staff | From Page: A3

Digital device use is up among school-age children

By Special to The Enterprise | From Page: A4

 
 
Backpacks for Kids launches annual donation drive

By Enterprise staff | From Page: A7

Seniors share homes for savings, companionship

By The Associated Press | From Page: A9 | Gallery

 
City of Davis recruits for its advisory commissions

By Enterprise staff | From Page: A9

Farmers Market shoppers can pick up free reusable produce bags

By Special to The Enterprise | From Page: A10 | Gallery

 
.

Forum

It’s not what they thought

By Creators Syndicate | From Page: B5

 
Protect and expand Medicare

By Letters to the Editor | From Page: A8

It’s insurance against extremes

By Letters to the Editor | From Page: A8

 
Political cartoon was offensive

By Letters to the Editor | From Page: A8

Let’s gas up for TAPS

By Letters to the Editor | From Page: A8

 
Railroads, listen up and respond

By Special to The Enterprise | From Page: A8

Tom Meyer cartoon

By Debbie Davis | From Page: A8

 
Treat children as refugees

By Letters to the Editor | From Page: A8

 
.

Sports

Swimley recalls a budding star in Giants’ Susac

By Bruce Gallaudet | From Page: B1

 
Nick Watney leads Barracuda Championship

By The Associated Press | From Page: B1

Stuart named to outstanding placekicker watch list

By Special to The Enterprise | From Page: B1 | Gallery

 
Going, going, gone: A’s trade Cespedes

By The Associated Press | From Page: B1 | Gallery

Safety Bethea finding a groove with new 49ers team

By The Associated Press | From Page: B2 | Gallery

 
UCD women’s golf tees up tough schedule

By Special to The Enterprise | From Page: B8

.

Features

.

Arts

‘Guardians of the Galaxy’: Droll sci-fi hijinks

By Derrick Bang | From Page: A11 | Gallery

 
Barnyard Theatre adds ‘Pinky’ performance after sold-out opening night.

By Special to The Enterprise | From Page: A11 | Gallery

WOH to hold auditions for ‘Zuccotti Park’

By Enterprise staff | From Page: A11

 
‘Tunes on Tuesdays’ come to Freeman Park

By Enterprise staff | From Page: A12 | Gallery

.

Business

Grand Cherokee: A grand, and long, ride

By Ann M. Job | From Page: B3 | Gallery

 
.

Obituaries

Patricia Eileen Hershberger

By Special to The Enterprise | From Page: A5

 
John Vernon McLane Wayland

By Special to The Enterprise | From Page: A5

Don Fife

By Special to The Enterprise | From Page: A5

 
Nancy Jane Fife

By Special to The Enterprise | From Page: A5

Clara Meyerhoff

By Special to The Enterprise | From Page: A5

 
.

Comics

Comics: Friday, August 1, 2014

By Creator | From Page: A6