The U.S. economy grew at an annual rate of 1.1% in the final quarter of 2005, a full three percentage points below its 4.1% pace in the third quarter of last year and more than 1.5 percentage points below the 2.8% growth rate economists generally expected.
Consumer spending slowed during the fourth quarter of 2005, as did government spending, purchases of software and equipment, and house purchases, the U.S. Commerce Department said as it released the first of three scheduled calculations of fourth-quarter economic growth on Jan. 27. A second round of figures, based on more complete data, is slated for release on Feb. 28.
Including its first look at the fourth quarter, U.S. GDP advanced 3.5% in 2005, Commerce said, a number that's in line with the economy's non-inflationary growth potential. In 2004, the U.S. economy grew a more robust 4.2%.
If the fourth-quarter GDP growth figure holds up, economists are likely to begin revising downward their already-modest increases projected for the first two quarters of 2006.