U.S. Economy Shrinks For First Time Since 2009 Due To Government Spending Cuts

According to the latest data from the Bureau of Economic Analysis, the U.S. economy contracted slightly in the fourth quarter of last year, shrinking by 0.1 percent. Analysts has expected growth of 1 percent.

This was a large tumble from third quarter’s growth of 3.1 percent and the first contraction since 2009. According to the Associated Press, “government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.” Government spending and investment decreased 15.0 percent in the fourth quarter. Meanwhile, personal expenditures increased by 2.2 percent and nonresidential fixed investment increased 8.4 percent.