Commerce Reports 4Q GDP Unchanged at 1.4% Growth Rate

The Commerce Department said Thursday that it was leaving its estimate of fourth—quarter U.S. economic growth alone and that it was standing by its report of 1.4% growth in the gross domestic product.

Commerce said that economic growth was hobbled by slowing consumer spending between October and December – and that indicators so far in the first quarter of 2003, show that that trend is unlikely to reverse.

The 1.4% rate of growth was the slowest since the third quarter of 2001, which was punctuated by the Sept. 11 terrorist attacks and subsequent drop in business activity.

Anxiety about a war with Iraq and the highest energy costs in more than a decade both worked to stunt consumer spending, which accounts for two-thirds of all economic activity.

During the quarter, spending on durable goods fell at an annual rate of 8.2%, Commerce said.

Analysts told Bloomberg News that the report was indicative of an economy with no momentum. Several economists said the lack of economic momentum, and now the war in Iraq, will help hold the economy in its current doldrums, Bloomberg reported.