Economic & Real Estate Report - Q4, 2012
Although political gridlock over fiscal policy didn’t push the U.S. economy over a cliff, a slowdown occurred during the final months of the year. The first advance estimate for 4Q12 gross domestic product (GDP) showed the U.S. economy contracted 0.1%, representing the first quarterly decline since the middle of 2009.
Additionally, consumer confidence plunged during December, primarily due to worries regarding the fiscal cliff, and manufacturing activity continued to fluctuate. Still, the economy expanded 2.2% for all of 2012, bettering 2011’s growth of 1.8%. Job creation remained steady, if unspectacular, during 4Q12 as 151,000 jobs were created monthly during this period. However, the unemployment rate moved little and still lingers slightly below 8.0%. Nonetheless, there were several positive developments. Driven by the continued resurgence in the housing market, construction activity increased to its highest level since August 2009 in December and consumers increased spending during 4Q12, largely driven by strong automobile sales. However, there are numerous challenges confronting the U.S. economy in 2013, including the European Debt Crisis, government spending cuts and prolonged political budget fights.