US economy growth slowed to 0.7% in fourth quarter

The U.S. economy grew at a sluggish annual rate of 0.7% from October to December, significantly downgraded from an initial estimate of 1.4%. This slowdown is attributed to a 16.7% drop in federal government spending due to last fall’s 43-day government shutdown, which reduced growth by 1.16 percentage points. Consumer spending increased by 2%, down from 3.5% in the previous quarter, while business investment saw a healthy rise amid concerns over job market weakness and rising oil prices.

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