Reply #46: Economic growth in 2007 weakest in 5 years [View All]

[Ghost Dog]

WASHINGTON (Reuters) - Economy 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.

/... http://www.earthtimes.org/articles/show/180488,economic-growth-in-2007-weakest-in-5-years.html