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Thursday, 21 December, 2000, 14:05 GMT
US economy slows sharply
The booming economy has boosted jobs and stocks
The booming economy has boosted jobs and stocks
The US economy grew at its slowest rate in four years, revised figures for the third quarter show.

The Commerce Department revised its estimate of growth of gross domestic product (GDP) in the third quarter to 2.2%, from a previously reported 2.4%.

This compares with a growth rate of 5.6% in the second quarter and provides one of the strongest indications to date that the end of the longest economic boom in US history is in sight.

This will increase pressure on the Federal Reserve to cut interest rates when it next meets in January.

The US central bank decided against raising interest rates on Tuesday but hinted heavily that it was in favour of doing so a its next meeting.

The Fed has raised interest rates six times between June last year and May this year, as part of an effort to bring the economy slowly back to earth.

Part of the reason for the US slowdown was weaker exports of goods and services.

Prices rose by an estimated 1.8% in the third quarter, compared with 2.1% in the second quarter.

Declines in residential investment, government spending, and inventory investment were offset continued growth in consumer and business spending.

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See also:

19 Oct 00 | Business
US trade gap shrinks sharply
06 Oct 00 | Business
US jobless at 30 year low
03 Oct 00 | Business
US rates unchanged
12 Oct 00 | Business
US stocks dive
14 Sep 00 | Business
US inflation 'tamed'
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