U.S. Economy Grew Sluggishly in Fourth Quarter

The gross domestic product in the United States grew at a rate of 0.7% in the fourth quarter of 2002, the Department of Commerce said, an even slower than many economists had expected, news services reported.

The GDP is the total of all the goods and services produced in the country. The slow 0.7% rate of growth was the worst performance for GDP since the third quarter of 2001, when the country was in the throes of a recession.

The Commerce Department revised its third-quarter GDP figure to a 4% rate of growth. A survey of economists by Bloomberg News had projected fourth-quarter GDP growth to be about 0.9%, the news service reported.

The economic growth in the fourth quarter was held back by the weakest consumer spending — rising just 1% — since the first quarter of 1993. In the previous quarter, spending grew 4.2%, Commerce said.

The low level of consumer spending was driven by a 7.3% decline in spending on durable goods like automobiles and appliances, Commerce said.

Consumer spending accounts for about two-thirds of the all economic activity in the United States.

In a separate report, the Labor Department said that initial jobless claims rose 14,000 to 397,000 last week. The four-week moving average, which levels off volatility in the weekly statistic, fell 3,000 to 384,000 in the week ended Jan. 25.

The moving average was the lowest it has been since the week ended Nov. 30, Labor said.