WASHINGTON (MarketWatch) - The U.S. economy grew in the fourth quarter - but just barely - instead of contracting for the first time in three and a half years, the Commerce Department said Thursday. The U.S. expanded at a 0.1% annual rate in the last three months of 2012, better than the initially reported 0.1% drop but well below the third quarter's 3.1% pace. Stronger residential construction and an improvement in net exports pushed growth into positive territory. They offset a bigger decline in government spending than previously suggested as well as a sharper deceleration in the buildup of business inventories. Construction spending on new homes was revised up to a 17.5% increase from 15.3%. Exports fell a revised 3.9% instead of 5.7%, while imports dropped a sharper 4.5% vs. an initially reported 3.2% decline. Consumer spending was revised down a tick to 2.1%, while government spending dropped 6.9% instead of 6.6% as originally reported. Business inventories, meanwhile, grew a scant $12 billion in the fourth quarter after previous advances of $60.3 billion in the third quarter and $41.4 billion in the second. The slower pace of inventory growth subtracted 1.6 percentage points from fourth-quarter GDP. Lower government spending chopped 1.4 percentage points off GDP. Also, the government trimmed the increase in personal income in the fourth quarter to a 6.2% gain from 6.8% previously. Inflation as measured by the PCE index rose at a subdued 1.5% rate, or by 0.9% excluding food and energy. The government revises the original GDP report twice to incorporate fresh data not available for the preliminary reading. A third and final reading will come out next month.

http://www.marketwatch.com/story/us-econ...=MW_latest_news

Not! When the first estimate came in at the -0.1% figure we knew that it would not stand. We should take bets on what the third estimate will be. 0.2 to 0.5 is my bet.

Here's my obligatory chart from ShadowStats. The blue line shows real GDP deflated by an index that measures the cost of a set standard of living. Note the GDP includes government spending which has been increasing as a percent of the GDP.

For those who are interested the PCE that is being used is an index that is pure substitution effect.

Thanks algernonpj, I knew that you would post it! The world we live is now a bunch of idiots breathlessly scurrying around the publication of worthless numbers 3 times each quarter.