- Dubai Seeks Debt Delay, Stokes Default Fears
- Black Friday to Avoid Red Ink; Greenback Gets the Blues
- Bankruptcies Jump, Hitting Highest Level in Four Years
- AIG, Ex-CEO Greenberg Reach Pact to Settle Disputes
- Bank of America CEO Search May Extend Into 2010
- Steepest Black Friday Discounts, Revealed
- Fed to Counsel Moviegoers on How to Use Credit Cards
- 'Cancer of Fraud' Permeates Health Care System: Critics
- Where Do Pardoned Turkeys Go?
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- The Executive Job Search
- Where Do Pardoned Turkeys Go?
- Salvation Army's Kettles Now Credit Card-Ready
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- S&P Stocks Trading at New 52-Week Highs
- Chinese Overcapacity is Worsening, EU Chamber Warns
- Oil Friday
- Trader Talk
Text Size 
U.S. growth skidded lower in the fourth quarter and was the weakest in five years for all of
2007, according to a government report on Wednesday that highlighted the toll an enfeebled housing sector has taken on the national economy.
 |
Gross domestic product, which measures total goods and services output within U.S. borders, edged up at a weaker-than-expected 0.6 percent annual rate in the fourth quarter and for the full year advanced only 2.2 percent - the slowest growth in annual GDP since 1.6 percent in 2002.
Analysts surveyed by Reuters had forecast that fourth-quarter GDP would grow at a 1.2 percent rate. The lackluster fourth quarter performance followed a booming third quarter when GDP surged at a 4.9 percent rate and is likely to fuel fears the economy is at risk of tumbling into recession in 2008.
Spending on new-home building plunged 23.9 percent in the fourth quarter, the biggest quarterly drop in 26 years, after falling 20.5 percent in the third quarter. Over the course of
the full year, residential spending fell 16.9 percent, the worst annual performance since 1982.
There were also signs that prices were bubbling higher as a gauge favored by the Federal Reserve - personal consumption spending excluding food and energy items - gained at a 2.7
percent annual rate in the fourth quarter. That was well ahead of the third quarter's 2 percent increase and Wall Street expectations. It was the biggest increase for any three months
in 1-1/2 years.
The Fed already has cut U.S. interest rates by 1-3/4 percentage points since last fall and is expected to announce later on Wednesday that it is reducing them again, while the Bush administration is negotiating with Congress on a fiscal stimulus package to try to spur growth.
Consumer spending, which fuels more than two-thirds of U.S. growth, held up relatively well in the fourth quarter, growing at a 2 percent annual rate compared with 2.8 percent in the third quarter. But growth in consumer spending for the full year 2007 was the softest since 2003, a further indication that weakening housing prices and markets are putting a strain on
household finances and confidence.
Print
Email
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.
Data is a real-time snapshot *Data is delayed at least 15 minutes