U.S. Economic Growth Faces Sharp Downturn

The United States saw a notable slowdown in economic growth during the fourth quarter, as revealed by revised data on Friday. Consumer spending and business investment declines played a major role, according to the Commerce Department's Bureau of Economic Analysis. The revised growth rate stands at 0.7% annually, downsized from the previously reported 1.4%.

In the third quarter, the economy expanded at a pace of 4.4%, but the reduction this past quarter is attributed to cuts in government expenditures, particularly in state and local government structures, and slowed export growth. Additionally, the 43-day government shutdown last year had a lingering negative effect on GDP growth.

Final sales to private domestic purchasers, excluding government spending, trade, and inventories, increased by 1.9%. Although this was less than the earlier 2.4% estimate and below the 2.9% growth in the previous quarter, growth expectations for this quarter are more optimistic. However, rising oil prices due to the U.S.-Israeli conflict with Iran pose risks to this outlook.