Economy Slumps to 4-Year Low

The country's economic growth has dwindled to its lowest rate in four years, with the housing slowdown, high energy prices, and a looming trade deficit driving lower-than-expected numbers released today. The economy grew 1.3% in the first quarter of 2007, down from 2.5% in the last three months of 2006, and below the rate of inflation.

In Commerce Department figures released today, one bright spot was consumer spending, which continued to look solid. Housing statistics were particularly worrisome, but monetary policymakers' hands may be tied. "Given the Fed's focus on inflation right now, they're not in a position to stimulate growth," senior market economist Kevin Logan of Dresdner Kleinwort said. (More economic growth stories.)