The US economy grew at a slower-than-expected pace from October to December, restrained by the weakest consumer spending in almost a decade.
GDP, the sum of all goods and services produced in the US, expanded at a 0.7 percent annual rate, the slowest since the third quarter of 2001, when the nation was in recession. The economy grew at a 4 percent pace in the third quarter.
While the slowdown may raise questions about a possible double-dip recession, economists said consumer spending likely would rebound in the first three months of this year.
"We will be doing much better by the middle of the year," said Carl Tannenbaum, chief US economist at LaSalle Bank in Chicago, before the report. "We have very, very low interest rates, it's likely that we will get some kind of fiscal stimulus and all of us are hoping that the situation in Iraq will resolve itself, one way or the other, by the middle of the year." Tannenbaum projects the economy will grow at a 2.7 percent pace this quarter.
For all of last year, the world's largest economy expanded 2.4 percent, following a 0.3 percent growth rate in 2001 that reflected the recession that began in March of that year. Many economists agree that contraction ended in either November or December of 2001.
Consumer spending rose at a 1 percent annual pace last quarter. That was the weakest since the first quarter of 1993.
Imports rose by US$14.2 billion in the fourth quarter while exports fell by US$4.7 billion. That left a net trade deficit of US$506.9 billion compared with a US$488 billion gap in the third quarter.
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