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| Money
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| US economic growth revised down |
| The US economy grew at a pace of 2.2% in the last three months of 2006, down from a previous estimate of 3.5% and below analysts' forecasts
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| UNITED STATES OF AMERICA
, 28-February-2007
9:49:3 AM |
| The slower-than-expected growth was down to businesses adding less to their stocks and consumers spending less.
The US Department of Commerce also said that the economy grew by 3.3% in 2006, below an earlier estimate of 3.4%.
Earlier in the week, former Federal Reserve Chairman Alan Greenspan said the US could see a recession in 2007.
He said a number of recent signals, including a flattening-out of profit margins, suggested that a contraction in the economy was not out of the question.
'Breather'
During the final quarter of 2006, spending by consumers grew at an annualised rate of 4.2%, against an earlier estimate of 4.4%. For the year as a whole, spending grew by 3.2%, down from growth of 3.5% in 2005.
There was further evidence of the problems in the US housing market, with spending on new home-building down 19.1% in the quarter - the worst drop since early 1991.
The US Commerce Department figures also showed that exports of goods and services grew at a pace of 10.5% between October and December 2006, compared with 6.8% in the previous three months.
In contrast, imports of goods and services fell at a rate of 2.2% in the quarter, compared with a 5.6% increase in the previous three months.
The "core" price index - viewed as a key indicator of future inflation pressures - hit 1.9% for the quarter, down from the 2.1% originally estimated.
But analysts were not overly concerned by the figures.
Ken Mayland, president of ClearView Economics, said the latest results were part of a "mid-course breather", showing a temporary setback, rather than a move toward recession.
"I think it is unfolding as a slowdown, not a turndown - meaning recession," he said.
Later on Wednesday, Ben Bernanke, head of the US Federal Reserve, is scheduled to testify on Capitol Hill about the US economy at 1500 GMT.
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