US economy slowed sharply in fourth quarter: Commerce Dept.
The US economy slowed sharply in the final three months of 2015 as American households curbed spending and corporations reduced capital investment, sparking fresh fears of anemic growth in the United States.
Gross domestic product, or GDP, increased at a 0.7 percent annual rate in the fourth quarter ending in December after a 2 percent increase in the third quarter, the US Commerce Department reported Friday.
Overall, the economy grew 2.4 percent in 2015 after a similar expansion in 2014.
Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 2.2 percent rate, a slump from the 3.0 percent growth recorded in the third quarter.
Export growth was also slower as the strong dollar made US goods more expensive outside the country.
Growth has weakened as companies deal with accumulated inventories and weak export markets, with the US economy negatively impacted by the global slowdown.
The US central bank, called the Federal Reserve, acknowledged on Wednesday that growth "slowed late last year."
The drop in growth of consumer spending would sustain fears that the US economy was "reaping few benefits from the oil price rout while paying the cost as oil sector revenues plunge," said Chris Williamson, chief economist at Markit.
Analysts say the growth slowdown is temporary and the economy is expected to snap back in the first quarter of 2016.
However, the US economy could experience more recessions in the coming years due to slower growth, financial strategists say.
In a note to clients on Wednesday, strategists at the Morgan Stanley financial services corporation argue that if the potential growth of the US economy is lower in the coming years, the US economy will enter another recession.
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