Falling government spending weighs on US growth in fourth quarter

February 28, 2014
Obsession
Debt
February 28, 2014

US growth wasn’t quite as good as we thought in the fourth quarter. A just-released revision to US GDP data shows that the world’s largest economy expanded at a 2.4% annualized rate in the fourth quarter. An earlier estimate clocked US growth at 3.2%.

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Household purchases grew at a 2.6% clip, down from the 3.3% rate that was previously reported. Tighter government budgets also continue to weigh on the US economy, with overall government spending down by 5.6%—deeper than the 4.9% decline previously reported. Overall, government spending cuts subtracted roughly 1% from overall GDP growth.

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