Economy grows at 1.0 percent rate in fourth quarter

Thursday, March 29th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ The U.S. economy, hit by a drop in spending on big-ticket items by businesses and consumers, grew at an annual rate of just 1.0 percent during the last three months of 2000, the weakest performance in more than five years.

The Commerce Department's final reading Thursday on fourth-quarter gross domestic product _ the total output of goods and services produced within the United States _ showed the economy grew a bit more slowly than previously thought.

One month ago, the government pegged fourth-quarter growth at a 1.1 percent rate and before that at a 1.4 percent rate. Many analysts expected the final GDP reading to stay unchanged at the 1.1 percent rate.

In the third quarter, the economy grew at a 2.2 percent rate.

Thursday's report also showed that after-tax profits of U.S. corporations fell in the fourth quarter by 4.3 percent, reflecting the toll of the economic slowdown and higher energy prices. That was the largest decline since the first quarter of 1998, when profits dropped by 8.4 percent. In the previous quarter, profits grew by 0.6 percent.