The US economy grew at a 1.7 per cent annual clip in the fourth quarter of 2005 as consumers kept their wallets closed, the Commerce Department announced Thursday. It was the slowest pace in nearly three years, but experts predict that the lull in economic growth was temporary. First quarter growth is expected to surge and the Federal Reserve this week said that the slowdown was only temporary. Thursday's data were the final revision of the gross domestic product (GDP) - the sum of all goods and services produced in the US - for the fourth quarter. An earlier estimate had predicted growth to be 1.6 per cent annually. For all of 2005, the economy grew 3.5 per cent, down from 4.2 per cent in 2004. Consumer spending, the most important factor in determining the GDP, was up only 0.9 per cent on an annual rate in the fourth quarter, compared to 4.1 per cent in the third quarter. The core personal consumption expenditures price index, which measures consumer spending excluding energy and food, increased at an annual clip of 2.4 per cent in the fourth quarter. The Fed watches the index and uses it as an inflation gauge. Business investment was up 4.5 per cent in the fourth quarter and corporate profits soared by the most in 13 years. --SP 21 35 Local Time 18 35 GMT
