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Housing slump puts brake on US economic growth PDF Print E-mail
Saturday, 02 February 2008

Agence France-Presse . Washington

US economic growth slowed dramatically during the last three months of 2007 to a 0.6 per cent annual crawl amid a worsening housing slump, a government report showed Wednesday.

The Commerce Department survey revealed that fourth-quarter growth in the world’s biggest economy was much weaker than economists’ expectations of a 1.2 per cent pace.

Gross domestic product growth sharply declined from a 4.9 per cent annualised pace in the third quarter, decelerating to its weakest level since the fourth quarter of 2002.

Economists blamed the slowdown on the ailing housing market and companies cutting their inventories as fears mount that the giant US economy could be falling into a recession.

‘The economy came to a screeching halt at the end of last year, but that does not mean we are in or even headed for a recession,’ said Joel Naroff of Naroff Economic Advisers.

The Federal Reserve and the administration of president George W Bush are trying to bolster growth to avoid a recession, recognised as two straight quarters of negative growth.

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