US economic growth slowed to 4 per cent annual pace in the fourth quarter from 8.2 per cent in the third quarter, the Commerce Department estimated today.
Economists were looking for growth of about 4.9 per cent, with some estimates hitting 6 percent, according to a survey conducted by CBS MarketWatch.
Consumer spending, business investment and government spending all slowed from the third quarter's frenetic pace. Exports rose at the fastest pace in seven years.
Inventories added to growth for the first time in five quarters. Final sales of domestic product, which excludes inventory accumulation, rose 3.4 per cent for the quarter.
Final sales to domestic purchasers - which represent final demand in the US - increased 3.1 per cent. Economists are expecting growth of about 4 per cent for the next several quarters, with a healthy balance between spending and investment, and between the public and private spheres.
The Federal Reserve said earlier this week that it could afford to be "patient" before raising interest rates from 45-year lows. Excess slack in the economy, especially unemployed workers, must be worked down with faster-than-trend growth For all of 2003, gross domestic product increased 3.1 per cent from 2002's level.
It was the fastest growth since 3.7 per cent in 2000. GDP rose 2.2 per cent in 2002. From the fourth quarter of 2002 to the fourth quarter of 2003, GDP increased 4.3 per cent.