U.S. economy shrank in Q4

Jan 30, 2013, 9:30 AM EST
The American flag flies over the US Capitol on January 20, 2013.
AFP/Getty Images/SAUL LOEB

The U.S. economy unexpectedly shrank by 0.1% at an annualised rate in the fourth quarter of 2012 as fiscal cliff concerns weighed on government, business and consumers. It was the first quarterly contraction since 2009. Defense spending saw its biggest fall in four decades. Dwindling inventory growth also dragged on the economy, even as household purchases picked up.