New data confirmed economic growth has been cooling- but there are emerging signs that there could be improvement this spring. Bobbi Rebell reports.
U.S. economic growth cooled in the 4th quarter. The final reading of GDP unrevised at just 2.2 percent. Businesses cut back on inventory and investing in equipment. Corporate profits were hurt by the strong dollar- hitting U.S. multinationals the hardest. But that only tells part of the story says Chris Rupkey, Chief Financial Economist at MUFG Union Bank: SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, MUFG UNION BANK (ENGLISH) SAYING: "I don't think the wheels are coming off the bus here and whenever- I'm always suspicious whenever you see GDP like 2.2% but you have consumer spending sky high at 4.4 percent. It was revised up a little for the 4th quarter today. If the consumer is running flat out at 4% plus, how bad can the economy be? So I mean I think we are doing ok." That growth in consumer spending was the fastest pace since the first quarter of 2008. And the consumer is key. Even though the University of Michigan Consumer Sentiment index fell- the level- now at 93- is still pretty strong. SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, MUFG UNION BANK (ENGLISH) SAYING: "We are right in the zone. anywhere in the 90s here is a consumer that is pretty upbeat and optimistic and you know why? Because we created a million jobs over the last 3 months. there is a lot of opportunity out there in America." While first quarter growth estimates are modest- around one percent- growth is expected to pick up in the second quarter that begins in April.