The economy grew an annualized 0.6% in the fourth quarter much below median estimates of 1.2% and that markets the lowest pace of growth since the economy suffered post 2002 recession; and that is well down from 4.9% expansion in the previous quarter; as the Commerce Department reported today.
The most important aspect was the slowing of investment in houses falling at the fastest rate in 26 years shedding a total of 1.2% from growth, construction is now down a total of 29% over the past two years as the housing slump now markets the biggest since 1982.
Consumption also came below estimates at 2% adding 1.4% to growth after adding near the 2% in the previous quarter to growth. IndividualÃ¢â‚¬â„¢s willingness to spend rather depends on income and the labor market did slow in those months, nevertheless the ADP report today reported a strong 130 thousand jobs added in January to the economy by the private sector after a revised 38K. The report did not prove still to be dependable and comprehensive to actually nonfarm payroll figures yet, nowadays everything counts.
That all takes growth for 2007 to a total of 2.2% -the slowest rate since 2002- and slowing from the previous year, where the economy expanded in 2006 2.9 percent.
The favorite inflation measure for the Feds comes to add misery as they are a few hours away form cutting rates for the second time in 9 days. As I said earlier to you dear reader the feds are to refer to inflationary levels in the economy though they are on mission Ã¢â‚¬Å“save growthÃ¢â‚¬Â yet it still matters. The PCE grew much stronger in the quarter with 3.9% from 1.8% previous, while the favorite remains the core which also rose to 2.7% while the previous quarter it was 2.0%.
The FOMC deliberates the final votes now and I donÃ¢â‚¬â„¢t think they will change their mind regarding that decision, as I said they canÃ¢â‚¬â„¢t risk loosing that business confidence; the market remains jittery until the zero hour were the decision will be out, you never know dear reader EVERYTHING now is a possibility we canÃ¢â‚¬â„¢t take anything for granted anymore as PANIC roams the marketsÃ¢â‚¬Â¦