Fourth quarter not as bad as first thought

Commerce Department reports economy grew at 1.4 percent pace in final period of 2002

? The economy grew at a 1.4 percent rate in the final quarter of last year — twice as fast as the government first estimated. While the performance is still considered below par, it showed that the recovery didn’t stumble as badly as previously thought.

The revised reading on gross domestic product, reported by the Commerce Department Friday, is based on more complete data and marked a stronger showing than the miserable 0.7 percent growth rate that was reported for the fourth quarter of 2002 a month ago.

GDP measures the total value of goods and services produced within the United States and is considered the best barometer of the economy’s health.

The major factors in the upward revision to fourth quarter GDP were stronger investment by businesses in building up stockpiles of unsold goods and a slight boost to consumer spending, the main force keeping the economy going.

Even though the new fourth-quarter estimate was slightly better than the 1 percent growth rate economists were forecasting, it still represented a big slowdown from the third quarter, when the economy grew at a brisk 4 percent pace.

The economy has been coping with uneven growth as a quarter of strength has been followed by three months of weakness.

Worries about a possible war with Iraq, the roller-coaster stock market and a lackluster job market are weighing heavily on the economy, economists say.