STOCK MARKET WATCH -- Monday, 29 October 2012

[xchrom]

45. Consumers Spur Growth in U.S. as Exports Decline

http://www.bloomberg.com/news/2012-10-29/consumers-spur-growth-in-u-s-as-exports-decline.html

The U.S. economy is being thrown back on its own devices as sputtering global growth blunts America’s efforts to use exports to help power its expansion even as the value of the dollar hovers near a record low.

Exports fell last quarter for the first time in 3-1/2 years, according to Commerce Department figures released on Oct. 26, clipping growth by almost a quarter percentage point. The shortfall was made up by increased consumer spending, higher government outlays and gains in residential construction. Gross domestic product climbed at an annual rate of 2 percent in the third quarter after rising 1.3 percent in the second.

The shift to domestic drivers of the expansion comes at an opportune moment and may be a harbinger of better times in 2013, especially if the rest of the world rebounds and the U.S. avoids the so-called fiscal cliff of higher taxes and lower government spending.

“The improvement in the domestic engines of growth will allow us to muddle through the worries on the European side and the Asian side and probably pick up pace next year,” said Joseph Carson, director of global economic research for AllianceBernstein in New York. He sees the economy expanding 2.8 percent in 2013 after rising 2.2 percent this year.