2007 Economy Worst in Five Years

Dismal Fourth Quarter, Marked By Weak GDP, Caps Rough Year, Commerce Department Reports

(AP)  The economy almost stalled in the final quarter of last year with a growth rate of just 0.6 percent, its worst year since 2002.

The Commerce Department's report on the gross domestic product, released Wednesday, showed an economy that had deteriorated considerably during the October-to-December quarter as worsening problems in the housing market and harder-to-get credit made individuals and businesses more cautious in their spending. Fears of a recession have grown.

For all of 2007, the economy grew by just 2.2 percent, the weakest performance in five years, when the country was struggling to recover from the 2001 recession. The housing collapse dealt the economy its biggest blow last year. Builders slashed spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.

The fourth-quarter's performance was much weaker - half the pace - than economists were expecting. They were forecasting growth to clock in a 1.2 percent pace.

The 0.6 percent annualized increase in gross domestic product (GDP) marked a big loss of momentum from the third quarter's brisk, 4.9 percent showing. The fourth-quarter pace was the slowest since the first quarter of last year.

The GDP figures come as worries mount that the country is on the verge of a recession or perhaps is already sliding into one.

To help bolster the economy, the Federal Reserve was poised Wednesday to again cut interest rates. An afternoon announcement was expected.

The fragile economic situation has spurred rare cooperation among Democrats, Republicans and the White House to quickly enact legislation to stimulate the economy.

GDP measures the value of all goods and services produced within the United States and is the best barometer of the country's economic health.

Consumers whose spending is critical to the economy's well-being tightened their belts.

In the fourth quarter, consumer spending slowed to a pace of 2 percent, down from a 2.8 percent growth rate in the prior quarter. For all of last year, consumers boosted spending by 2.9 percent, the smallest increase since 2003.

Businesses also watched their spending more closely during the final quarter of last year. Fearing a lessening appetite from their customers, they cut inventories of goods. That shaved 1.25 percentage points from fourth-quarter GDP, the most in a year.

Spending by businesses on equipment and software slowed to a pace of 3.8 percent in the fourth quarter. For the year, such spending was up just 1.4 percent, the worst showing since 2002.

Sales of U.S. goods and services abroad also slowed sharply in the fourth quarter. Exports grew at a 3.9 percent pace, compared with a sizzling 19.1 percent growth rate in the third quarter. That strong export growth was a key reason why the economy performed so well as a whole in the prior quarter. For all of 2007, exports grew by 7.9 percent, the slowest in two years.

[wardoglrs]

2008 Presidential Candidate Spending Analyses

http://www.ntu.org/main/page.php?PageID=141

[taylpatr]

It''s not Clintons fault; he had our economy in the black for once. If any of you who are at least 50 don''t get it, after all the regimes we''ve seen come and go in our lives, any time tax cuts are enacted, they ONLY favor the rich. Bush and his ilk are comfortable with the rest of us having to struggle. They beleive that the more comfortable we let the rich become, the better off our economy will be. Sure sonds like slavery all over again, but this time it''s not black and white, but rich vs. poor. Do ya get it now?

[grazinggoat]

"These idiots on a radio station I listen to every morning, this morning, were complaining that the economy is in great shape and the media is creating an impression.

On some things, I''''''''ll agree. Unfortunately, those cats live in a bubble. The number of "STORE CLOSING" signs can''''''''t be wrong..."

Posted by hypnotoad72 at 05:02 PM : Jan 30, 2008
----------------------------------------

...and just look at how much the prices of consumer goods and services have increased, yet pay rates and jobs have declined, (at least in my state). To me, that spells recession.
Posted by GeorgiaGrl1 at 05:25 PM : Jan 30, 2008

-It''s skimming time. Those economic cycles are caused on purpose in order for the farmers (banks, big corpos, civil-servant disguised crooks and riches of this world) start the wool shearing/skinning (lol) from the tax-payers and fellow citizens. Some lose their shirts, some lose their homes, families etc... Meanwhile, as said by SgtRDS, rich people are getting filthy wealthier. Until some brains get milked by the milking (owners) and our newer and revolutionary economy will be based on war industry, and invading. A culture eating another on. What a fricking world!!!

[inventagod]

buSHAMErica

[georgiagrl1]

"These idiots on a radio station I listen to every morning, this morning, were complaining that the economy is in great shape and the media is creating an impression.

On some things, I''''ll agree. Unfortunately, those cats live in a bubble. The number of "STORE CLOSING" signs can''''t be wrong..."



--------------------------------------------------------------------------------

Posted by hypnotoad72 at 05:02 PM : Jan 30, 2008

...and just look at how much the prices of consumer goods and services have increased, yet pay rates and jobs have declined, (at least in my state). To me, that spells recession.

[hypnotoad72]

These idiots on a radio station I listen to every morning, this morning, were complaining that the economy is in great shape and the media is creating an impression.

On some things, I''ll agree. Unfortunately, those cats live in a bubble. The number of "STORE CLOSING" signs can''t be wrong...

[georgiagrl1]

"For those who will get this money (some of us won''''t) do us all a favor: if you owe money--pay a bill. Don''''t be as irresponsible as Bush is hoping you will be--remember his irresponsibility and a lot of our own individual irresponsibility is what got us into this mess in the first place."


--------------------------------------------------------------------------------

Posted by b-easy63 at 12:09 PM : Jan 30, 2008

Oh I fully intend to spend this check recklessly....on gasoline and groceries!

[aaabee-2009]

Posted by SgtRDS at 02:51 PM : Jan 30, 2008

Capitolism is not the economic savior that these Cons say it is, not is it corruption-free. This is the other side of the self-regulating free market coin.

[sgtrds]

this is no real surprise. It''s the normal outcome of a trickle down economy, just like when that moron Reagan tried it in the 1980''s. Basically the trickle down theory works by making the already sickeningly rich even more nauseatingly rich in hopes that they''ll vomit and then the rest of us get to feed off from their puke.

[aaabee-2009]

Posted by RowdyTexan2 at 10:30 AM
That is so true, but in the end they will have steak while we will eat mud cookies. The rich are buying up all the gold on the market - no else has money.
Posted by mcv57 at 12:24 PM : Jan 30, 2008

And...don''t forget that the rich are also buying and gaining control over natural resources like water table rights, natural gas rights, drilling rights, land leases, mineral and mining rights, and other viable resources that all humans need, as well as obtain rights to own, or obscure, inventions that can access these resources or make them obsolete.
http://www.trinity.edu/departments/philosophy/n_atural_resources.htm

When you talk about greed, you are talking about a human that sets personal gain above the general welfare of humanity, such as we have seen in the greed and anti-American, anti-Constitutional machinations of our governmental leadership for 7 years. These kind of people consider their wants to be above the wants, or needs, of humanity.