Economic Growth Slows

WASHINGTON (Reuters) - U.S. economic growth slowed sharply in the fourth quarter to the weakest pace in three years as consumers spent less robustly, growth in home building eased and businesses were less eager to boost investments, a government report on Friday showed.
Gross domestic product, the broadest measure of economic activity within U.S. borders, advanced at a surprisingly weak 1.1 percent annual rate in the October-December period -- little more than a quarter of the third quarter's 4.1 percent rate and the weakest for any three months since 0.2 percent in the fourth quarter of 2002.
The softer-than-anticipated data shocked financial markets, prompting a decline in the dollar's value and a jump in bond prices as investors prepared to shift assets from stocks into debt securities.
Fourth-quarter growth was far weaker than the 2.8 percent rate that Wall Street economists had forecast and reflected widespread softness.
Consumer spending, which fuels two-thirds of national economic activity, slowed to a 1.1 percent rate of growth, sharply below the third-quarter rate and the weakest since a 1 percent gain in second quarter of 2001. Spending on costly durable goods, which include cars and other items intended to last three years or more, plunged at a 17.5 percent rate.
That was the steepest drop in durables spending in nearly 19 years, since a 23.2 percent fall in the first quarter of 1987.