News / USA

    Central Bank Says US Economy 'Paused'

    A television screen in a post on the floor of the New York Stock Exchange shows the decision of the Federal Reserve, January 30, 2013.
    A television screen in a post on the floor of the New York Stock Exchange shows the decision of the Federal Reserve, January 30, 2013.
    VOA News
    Top officials of the U.S. central bank say the economy "paused" in recent months.

    That is why the Federal Reserve decided to continue an effort to stimulate the economy.  That program involves buying $85 billion worth of bonds a month, and is intended to cut long-term interest rates.  The bank is also keeping short term interest rates at the record-low levels where they have been for some time.

    The fed action came the same day a study showed the U.S. economy shrank slightly in the last three months of 2012.  Government experts blamed the slowdown on cuts in government spending, slowing exports, and businesses keeping smaller inventories.

    Wednesday's report from the Commerce Department says the economy shrank at a one-tenth of one percent annual rate in the fourth quarter.  That is the worst performance since 2009, during the recession.

    The decline is a sharp slowdown from the more than three percent annual growth rate in the prior quarter.  This latest report came as U.S. consumers cope with higher taxes and while Washington is considering further spending cuts. Exports have been hurt by a recession in Europe, which cut demand for U.S.-made goods. 

    Growth was also hurt when businesses cut their stockpiles as managers worried they might not be able to sell all of their goods.

    An economic expert at Bankrate.com says businesses are likely to face less political uncertainty in January, February, and March, and the economy is poised to resume slow growth.  In an interview with VOA, Greg McBride says with fewer worries, businesses are more likely to stock up on goods to sell, which will give the economy a boost.

    The report said overall growth for 2012 was 2.2 percent, a bit better than the prior year.

    You May Like

    Video Rubio Looks to Surge in New Hampshire

    Republican presidential candidate has moved into second place in several recent surveys and appears to be gaining ground on longtime frontrunner Donald Trump

    UN Calls for Global Ban on Female Genital Mutilation

    Recent UNICEF report finds at least 200 million girls and women alive today have undergone female genital mutilation in 30 countries

    UN Pilots New Peace Approach in CAR

    Approach launched in northern town of Kaga Bandoro, where former combatants of mainly Muslim Seleka armed group and Christian and animist anti-Balaka movement are being paid to do community work

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: FirozaliA.Mulla DBA from: Dar-Es-Salaam Tanzania
    January 30, 2013 3:16 PM
    The US economy shrank 0.1 per cent at an annualised rate in the fourth quarter of 2012, rattling financial markets as one-off factors overwhelmed resilience in underlying demand. Much of the fall in gross domestic product was due to a big reversal in business inventories and a plunge in federal defence spending – both highly volatile – which each knocked 1.3 percentage points off growth. That suggests the underlying economy remains on a weak but stable growth path of 1-2 per cent. But the first reported decline in the US economy since the end of the recession in 2009 is a blow to confidence and highlights the uncertainty caused by fiscal policy. Market expectations were for a rise of 1.1 per cent. Consumption grew by 2.2 per cent at an annualised rate, adding 1.5 percentage points to growth, while business investment shrugged off fiscal cliff concerns to rise by an annualised 8.4 per cent, and housing investment rose by an annualised 15.3 per cent.



    Those numbers pointed to healthy underlying demand. “Frankly, this is the best looking contraction in GDP you’ll ever see,” said Paul Ashworth, chief US economist at Capital Economics in Toronto. “First-quarter GDP growth is going to be pretty weak because of the expiry of the payroll tax cut. But there is nothing in these figures to change our view that US GDP growth will accelerate as this year goes on,” he said. The weakness came from two categories that are notorious for their volatility. Inventory growth – which over the long run should average out to roughly zero – had added 0.7 percentage points to gross domestic product in the third quarter and defence spending had added 0.6 percentage That suggests a better guide to the underlying state of the economy is to look at the fourth quarter alongside third-quarter growth of 3.1 per cent – ending up with a mediocre, but steady, average of 1.5 per cent. “While inventories and government are what are most likely to catch the market’s eye it is hard to put a particularly positive spin on such a weak headline,” said David Semmens, senior US economist at Standard Chartered. “It will be important for Friday’s employment number to settle people’s nerves that this [the GDP figures] reflect the fiscal cliff concerns rather than a genuine stalling of the US economy.” There was an encouraging sign for Friday’s payrolls report when ADP, the private payrolls processing company, said on Wednesday morning that its survey found 192,000 new jobs created in December. Job growth was particularly strong at small businesses, it reported. The effects of the protracted negotiations to avoid the fiscal cliff – as government spending cuts and tax rises were due to be triggered by year-end – were in evidence in a large rise of 6.8 per cent in disposable incomes in the fourth quarter. Given modest wage and jobs growth, the most likely explanation was that wealthier consumers brought income and capital gains forward into 2012, in the expectation that tax rates were about to rise. Points. Both were more than reversed in the following three months. This was expected as there are feuds with the immigration and the gun laws these have to be polished yet I thank you Firozali A.Mulla DBA









    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.