Economic Growth Drops to Five Year Low

The gross domestic product, which measures total goods and services output within US borders, hit a weaker than expected five year low of .6% in the fourth quarter of 2007.

Analysts surveyed by Reuters had forecast that fourth quarter GDP would come back at 1.2 percent. The lower fourth quarter performance that followed a stellar third quarter GDP is likely to fuel fears of economic recession in 2008.

It’s no mystery that much of the recession is being fueled by the housing market. Spending on new home buildings dropped 23.9 percent in the fourth quarter, which is the largest quarterly drop in 26 years.

The Federal Reserve has already cut interest rates by 1.75 percent since last fall and is expected to announce later today that they will be reducing them again. This all follows the .75 percent rate cut that we had last week which was the largest rate cut in 23 years.

To read more about the US economic growth skids to five-year low of .6% head on over to CNBC.