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October 11, 2008 11:09:52 PM CDT

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Economic Growth Slowed to a Crawl in Q4

Posted Jan 30, 08 9:02 AM CST in Business 

(Newser) – Economic growth braked so violently in the fourth quarter of 2007 that it wiped out a stellar third quarter, dragging annual growth to a 5-year low. Last quarter’s 0.6% GDP growth—after 4.9% pace in Q3—was just half what analysts expected, as the housing component plummeted 24%, its biggest fall since 1981. One key inflation gauge also saw a big 2.7% increase, Bloomberg reports.

“The economy is growing, but it’s not growing fast enough,” said one economist. “The Federal Reserve is going to go half a point today.” Consumer spending, GDP’s biggest component, rose a less-than-expected 2.0%. Recession appears to be looming, and “if we have it, it could be much more painful because of the fragility of the financial sector,” another economist told Bloomberg.

Source Bloomberg

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US Treasury Secretary Henry Paulson (L) and Chairman of the Council of Economic Advisers Ed Lazear (R) hold a briefing on the economy 18 January, 2008 at the White House in Washington, DC. President George...   (Getty Images)
An unidentified consumer looks over rows of unsold 2007 3-series sedans and coupes on the lot of a BMW dealership in the south Denver suburb of Littleton, Colo., on Sunday, Oct. 28, 2007. Waning consumer...   (Associated Press)
An auction sign rests in front of this foreclosed home in Shaker Heights, Ohio in this Tuesday, Oct. 30, 2007 file photo. (AP Photo/Tony Dejak, File)   (Associated Press)
Traders work on Citigroup's equities trading floor on Thursday, Jan. 10, 2008 in New York. Citigroup Inc. and Merrill Lynch & Co., the No. 1 U.S. bank and largest brokerage house, are scrambling again...   (Associated Press)
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Federal Reserve  • recession  • Ben Bernanke  • housing crisis  • subprime crisis  • GDP


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