US economy hits the brakes in fourth quarter

US economic growth stalled in the last quarter of 2002 as Iraqi war fears, a slumping stock market and job fears cramped consumer spending.

Gross domestic product - or total economic output - slowed abruptly to a 0.7 per cent annualised growth pace in the October-December period last year, down from 4 per cent growth the previous three months, the US Commerce Department reported.

Consumer spending growth, the biggest engine in the economy, slid to the lowest level in nearly a decade, the data showed. But businesses boosted fixed investment for the first time in two years.

The US economy was expected to pick up in the first three months of 2003, however, driven by rock-bottom interest rates and by tax-cut plans, analysts said.

AFP