U.S. Economy Expanded 0.6 Percent, Less Than Forecast

[swag]

Source: Bloomberg

Jan. 30 (Bloomberg) -- The U.S. economy weakened more than forecast in the fourth quarter as housing sank deeper into recession and consumer spending cooled.

Economic growth slowed to an annual rate of 0.6 percent in October through December, half the rate forecast, following a 4.9 percent pace the previous three months, the Commerce Department said today in Washington. Residential construction dropped by the most in 26 years.

Housing slumped as subprime lending collapsed and financial markets seized up, putting the six-year expansion at risk. The Federal Reserve will likely cut interest rates today for the second time in nine days to shore up business confidence and try to prevent consumer spending from slowing even more.

``We're looking at very weak consumer spending this year, the housing market is still in recession and the equity market is going down,'' Brian Bethune, director of financial economics at Global Insight Inc. in Lexington, Massachusetts, said before the report. ``With headwinds and shocks so powerful and immediate, you can't expect anything but very weak growth this quarter.''



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=abX5IhROxcLg&refer=home

[4dsc]

1. I was wondering

just at what period in our history did housing take over a leading indicator to our economic streghth?? If our economy goes the way the housing market goes, we are truely in deep shit!!

[Javaman]

5. It took over when greenspan saw a gold mine to be made on the

desperation of Americans duped into thinking the American dream was having too much house than they could afford.

It took over when all our jobs were outsourced.

It took over when our manufacturing base was sent overseas.

It took over when our education system fell into the toilet.

It took over when our health system was gamed for profit instead of helping people.

Pick your year and poison. It all ends up to the year of the jackpot.

[Demeter]

2. Much Less Than the Inflation and Devaluation Rates!

Can we call it a Depression yet? Or how about a Recession, at least?

[greiner3]

3. Economic recession;

In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year

http://en.wikipedia.org/wiki/Recession

I'm betting (and I'm not a betting person) that the first quarter of 2008 may well be the first quarter of negative GDP growth in several. Timing is critical and the reports of US GDP third quarter, July-September, will be out right before the elections. Do you think it's possible that the administration may try to say that this third quarter report is somehow late and won't be released until after the elections?

[inMD]

4. timing is everything

Better get that economic stimulus package out quick to avoid 2 quarter decline. }(