There was bad news for the US this afternoon with a key economic indicator showing GDP growth decelerated in the fourth quarter. According to the Commerce Department, the US economy slowed in the fourth quarter, expanding at a 0.7pc annual rate from the previous quarter, compared with a 4.0pc growth rate in the third quarter. This is the weakest quarterly growth since the third quarter of 2001 and came in slightly below forecasts of Wall Street economists who had tipped the economy to expand at a 1.0pc growth rate.
For all of 2002, the economy grew at a 2.4pc rate, compared with an annual increase of 0.3pc in 2001. In the fourth quarter, the economy weakened due to a sharp slowdown in consumer spending, less inventory building and a widening trade deficit. These factors were partially offset by the first quarterly increase in business investment in two years and an increase in federal government spending. Final sales - GDP growth minus inventory behaviour - grew at a 1.3pc rate in the fourth quarter, down from a 3.4pc increase in the third quarter. //www.fxcentre.com