February 28, 2008
|Consumers boosted their spending at just a 1.9 percent pace in the fourth quarter.|
WASHINGTON (AP) – The economy skidded to a near halt in the final quarter of last year, clobbered by dual slumps in housing and credit that caused people and businesses to spend and invest more sparingly.
The Commerce Department reported Thursday that the gross domestic product increased at a scant 0.6 percent pace in the October-to-December quarter. The reading – unchanged from an initial estimate a month ago – underscored just how much momentum the economy has lost. In the prior quarter, the economy clocked in at a brisk 4.9 percent pace.
Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the country’s economic health.
Economists had thought the newly released fourth-quarter GDP would have been bumped up to a 0.8 percent growth rate.
The housing picture looked even more bleak in the new report.
Builders slashed spending on housing projects by a whopping 25.2 percent on an annualized basis in the fourth quarter, the biggest cut in 26 years.
And, even though economic growth slowed, inflation picked up – an ominous mix that could spell further trouble for the economy.