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Economic Relations

U.S. Economy Stalls, but Maintains Its Growth Potential

Big cuts in U.S. defense spending partly account for the slight contraction in the U.S. economy during the fourth quarter of 2012. Photo: ©AP Images

Big cuts in U.S. defense spending partly account for the slight contraction in the U.S. economy during the fourth quarter of 2012. Photo: ©AP Images

The U.S. Department of Commerce reported that the U.S. gross domestic product (GDP) shrank at an annualized rate of 0.1 percent during the last quarter of 2012, according to its initial estimate, citing a reduction in U.S. government spending, private inventory investments, exports and state and local government spending. The report on the GDP, which is the sum of all goods and services produced in the country, also noted increased American consumer spending. At the White House, press secretary Jay Carney told reporters January 30 that the reduction in U.S. economic growth reflects a “sharp drop in particular in defense spending,” with the reduction of American military activities in Iraq and Afghanistan and uncertainty over whether the U.S. Congress will reach agreement to avoid mandatory defense spending cuts that are scheduled to go into effect March 1. Read the full article.

U.S.-EU Highlights

Vice President Joe Biden meets with European Parliament President Martin Schulz in the Roosevelt Room of the White House in Washington, Wednesday, Nov. 28, 2012. Photo: ©AP Images

Photo: ©AP Images

Vice President Joe Biden Meets European Parliament President Martin Schulz in Washington

Vice President Biden welcomed the President of the European Parliament, the Honorable Martin Schulz, to the White House on November 28, 2012. The Vice President emphasized the importance the United States places on continued close engagement and cooperation with the European Parliament. The Vice President and President Schulz discussed the economic challenges and opportunities facing the United States and the European Union, stressed the importance of the Transatlantic partnership, and highlighted their mutual desire to strengthen job-supporting Transatlantic trade and investment ties. Readout available here.

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