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US economic growth cools, no sign in consumer spending flagging

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US economic growth cools, no sign in consumer spending flagging

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There was a sharp slowdown in US economic growth in the final three months of last year.

Consumer spending kept accelerating – indeed was at its fastest pace since 2006.

But businesses spent less and the trade deficit – the difference between imports and exports – widened.

The report came two days after the Federal Reserve said the economy was expanding at a “solid pace”.

That upgraded assessment that keeps the US central bank policymakers on track to start raising interest rates this year.

Gross domestic product expanded 2.6 percent compared to the same period in 2013.

That was just over half the third quarter’s spectacular 5.0 percent rate.

Most economists believe the slowdown will likely be short-lived thanks to lower fuel prices and as the US is now strong enough to cope with weaker economies elsewhere in the world.