US Q4 growth revised down, cut to 2.4% on weaker consumer spending & exports

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Economic growth in the United States at the end of last year was much weaker than earlier estimated.

The US government’s latest calculations show consumer spending and exports were less robust than initially thought.

GDP expanded at a 2.4 percent annual rate between October and December 2013, That was down sharply from the 3.2 percent pace initially estimated and reported last month.

Growth reached 4.1 percent in the third quarter of 2013.

Much of the downward revision was linked to consumer spending, which accounts for more than two-thirds of US economic activity.

Retail sales in November and December were weaker than had been assumed earlier.

The loss of momentum appears to have spilled over into the first quarter of 2014 – in terms of retail sales, home building and sales, hiring and industrial production.

The Federal Reserve, which has been reducing its stimulus measures, views the recent soft patch as temporary and linked to cold weather.

Fed Chair Janet Yellen has said it would take a “significant change” to the economy’s prospects for the central bank to suspend its policy of winding down bond buying to pump money into the US economy.

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