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To: c.hinton who wrote (6960)	1/30/2004 9:28:59 AM
From: isopatch	Read Replies (2) \| Respond to of 108915

<Economic Growth Below Expectations Friday January 30, 9:00 am ET WASHINGTON (Reuters) - U.S. economic growth slowed to a 4 percent annual rate in the final three months of 2003, less than half the third-quarter pace as consumers braked their spending, the Commerce Department reported on Friday. The expansion in gross domestic product was well below Wall Street economists' expectations for a 4.8 percent rate of increase and far below the sizzling 8.2 percent expansion posted in the third quarter when tax-induced spending was strong. The weaker-than-expected GDP figures spurred a sharp rise in U.S. Treasury prices while the dollar weakened immediately after the report was issued as investors weighed whether U.S. economic activity might not be as vigorous as thought. Analysts noted the fourth-quarter performance was above the economy's long-term sustainable rate of 3 percent but was likely to raise questions whether consumers, whose spending has led the recovery from the 2001 recession, might be flagging. "The big issue for 2004 is whether well-above average growth is sustainable," said economist Ken Mayland of Clearview Economics LLC in Pepper Pike, Ohio. "The fourth-quarter figure provides an object lesson," Mayland added, "The baton has been passed on to other sectors like manufacturing, inventory rebuilding and exporting with moderate but solid consumer spending." The Commerce Department said consumer spending, which accounts for two-thirds of gross domestic product, rose at a 2.6 percent pace in the fourth quarter, a sharp slowdown from the heady, tax-cut induced 6.9 percent gain of the prior three months. Growth in business spending and residential investment also slowed, it said. Gross domestic product, after adjustment for inflation, expanded 3.1 percent last year, up from 2.2 percent in 2002, for the best performance since 3.7 percent in 2000.> biz.yahoo.com