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all real estate is local Learn what���s happening in your neighborhood at homevalueforecast.com. Home Value Forecast provides unique insight into the current and future state of the U.S. housing market by focusing on micro market trends. Visit homevalueforecast.com today to view our monthly update, in-depth articles and market snapshot graphs from 30 top CBSAs. Call us today to learn how Pro Teck can help your company succeed. I 800.886.4949 www.proteckservices.com AMC SerViCeS | DeSK reVieW | DUe DiLiGeNCe | BPO | COLLATerAL POiNT | AVM/ANALYTiCS | HOMeVALUeFOreCAST.COM Q4 GDP FALLS FOR FIRST TIME SINCE RECESSION ENDED By Mark Lieberman, Economist for the Five Star Institute Battered by storms and droughts, real gross domestic product (GDP) fell 0.1 percent in the fourth quarter of 2012, the Bureau of Economic Analysis reported. The decrease marks the first ���negative growth��� since the official end of the Great Recession in mid-2009. Economists had expected a weak 1.0 percent growth rate compared with 3.1 percent GDP reported for the third quarter of 2012. For the full 2012 calendar year, GDP rose 2.2 percent compared with an increase of 1.8 percent in 2011. BEA, in reporting GDP���the broadest measure of the nation���s economy���emphasized that the fourth-quarter advance estimate released January 30 is based on source data that are incomplete or subject to further revision by the source agency. This report was the first of three Q 4 2012 GDP releases scheduled. The GDP downturn does not automatically signal a return to recession, which is loosely defined as two consecutive quarters of negative growth. That said, in the six-quarter recession that began at the tail end of 2007, GDP fell in Q1 2008, but rose in Q2 2008 before remaining negative for the next four quarters. The biggest hit to fourth-quarter GDP came from a 6.6 percent drop in government spending, 42 driven by a 15 percent decline at the federal level and a $42.4 billion cut in defense spending. At the same time, state and local government spending fell $2.5 billion in Q 4. Overall, government spending represented 18 percent of GDP last quarter. For the full year, federal spending fell $23 billion including a $21.9 billion drop in defense spending reflecting the winding down of operations in Iraq and Afghanistan. Personal consumption expenditures���the largest component of GDP���grew 2.2 percent in the fourth quarter, faster than the 1.6 percent growth rate recorded in the third. Private investment slipped 0.6 percent, primarily due to inventory investments and a fall-off in exports. Imports���which in GDP accounting are a subtraction from GDP���also fell, but not enough to offset the drop in exports. Residential fixed investment improved 15.3 percent during the final three months of 2012, the strongest growth rate recorded since the first quarter of last year. Non-residential fixed investment grew based on stronger investment in equipment; spending on non-resident structures fell 1.1 percent in Q 4. By the numbers, GDP fell $4.9 billion in the fourth quarter to $13.65 trillion. Personal consumption grew $51.8 billion and accounted for 70.9 percent of total GDP, up slightly from 70.5 percent in the third quarter. Residential fixed investment in the fourth quarter was reported at $384.3 billion, up $13.4 billion from the third quarter. Residential fixed investment represented 2.8 percent of total GDP in Q 4, up from 2.7 percent in Q 3. Government spending dropped $41.5 billion in the fourth quarter of last year, led by a decline of $42.4 billion in defense spending. For the full 2012 calendar year, though, federal spending fell $23 billion including a $21.9 billion cut in defense spending as a result of winding down operations in Iraq and Afghanistan. At the same time, state and local spending dropped $2.5 billion in the fourth quarter. Government spending represented 18 percent of GDP in the fourth quarter of 2012, down from 18.3 percent in the third. Superstorm Sandy, BEA said, resulted in losses of more than $44 billion in fixed assets���$35.8 billion lost in the private sector and $8.6 billion in government assets. Offsetting those losses, BEA said, would be about $28.1 billion in insurance payments���$20.6 billion of private insurance payments and $7.5 billion from the National Flood Insurance program. Those payouts do not include recently passed government assistance programs. BEA noted it was unable to estimate the storm���s impact on fourth-quarter GDP.

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