GNP Estimate For 4th Quarter Revised Upward --- Rate of Increase Is Now Put At 0.9%, vs. 0.5% Pace Calculated a Month Ago
WASHINGTON -- The U.S. economy grew at a 0.9% annual rate in the fourth quarter, the government said, faster than originally estimated but still the slowest pace of expansion in more than three years.</br></br>The new calculation was contained in the second of three Commerce Department estimates of the quarter's real gross national product, or the total value of the output of goods and services, adjusted for inflation. In its first report, released a month ago and based on less complete data, the department estimated that the economy inched along at a 0.5% annual rate, which most economists considered barely moving.</br></br>Though the revision still shows a severe slowdown at the end of last year, it strengthens the arguments of many analysts that the economy will emerge from its recent sluggishness without toppling into a recession.</br></br>Testifying on Capitol Hill after the report was released yesterday, Chairman Alan Greenspan of the Federal Reserve Board repeated his recent contention that the probability of a recession has slipped below 50%.</br></br>Nevertheless, he said, "Whenever you have economic growth as low as this you are vulnerable."