Economy slowed at end of ‘05 - East Valley Tribune: Business

Economy slowed at end of ‘05

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Posted: Saturday, January 28, 2006 6:06 am | Updated: 3:37 pm, Fri Oct 7, 2011.

WASHINGTON - The economy slowed to a near crawl in the final quarter of 2005, a listless showing that was the worst in three years. However, growth was respectable for the year and is expected to perk up again soon.

Gross domestic product clocked in at an annual rate of just 1.1 percent from October through December.

That marked a loss of speed compared with the third quarter’s brisk 4.1 percent pace, the Commerce Department reported Friday.

Belt tightening by consumers, businesses and the government figured into the fourth quarter’s slowdown.

GDP, which measures the value of all goods and services produced within the United States, is the best barometer of the economy’s fitness.

‘‘Considering the impact of the hurricanes and record heating bills last year, the economy continues to show remarkable resilience,’’ said Bill Cheney, chief economist at John Hancock Financial Services.

Looking at the fourth quarter, economists felt the slowdown was more of a temporary setback rather than a harbinger of a sustained period of economic troubles ahead.

‘‘The economy hit a pothole in the fourth quarter. I’m not at all worried about the health of the economy,’’ said Mark Zandi, chief economist at Moody’s Economy.com.

Zandi believes the economy in the current January-to-March quarter is already doing better and predicts growth will come in around a 4 percent pace.

For all of 2006, analysts project economic growth to top 3 percent.

Economy bits

SLOWER QUARTER: Gross domestic product clocked in at an annual rate of just 1.1 percent from October through December. That marked a loss of speed compared with the third quarter’s brisk 4.1 percent pace,

WHY THAT’S IMPORTANT: GDP, which measures the value of all goods and services produced within the United States, is the best barometer of the economy’s fitness.

WHAT A YEAR: The economy logged growth of 3.5 percent for all of 2005 — a year when the country coped with fallout from lofty energy prices and the devastating Gulf Coast hurricanes. Analysts called the GDP figure for all of 2005 solid, although it was down from 2004’s 4.2 percent gain.

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