Feeble GDP

The economy grew at a rate of just 2% in Q3. The drought subtracted 0.4% from growth, slumping exports clipped 0.2%, and falling business investment took 0.1% off GDP. By contrast, increased consumer spending added 1.4% to growth and increased defense spending boosted GDP by 0.6%. Growth in Q4 will be weaker due to the fiscal cliff, falling corporate earnings and consumers with limited ability to continue to boost spending.