
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, May 29, 1993                   TAG: 9305290043
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

ECONOMIC GROWTH NEARLY STALLED

Consumer caution and deteriorating foreign trade held economic growth to an anemic 0.9 percent annual rate during the first three months of this year, the government said Friday.

Growth, as measured by the gross domestic product, the sum of goods and services produced within U.S. borders, was less than one-fifth the robust 4.7 percent rate of last yerar's fourth quarter, the Commerce Department said.

Stock prices and the value of the dollar fell after the report was released. Commerce Secretary Ronald Brown said it "confirms our view that the economy is not growing fast enough to create new jobs and economic opportunities for the American people."

Much of the lapse in GDP growth came from a sharp cut in the growth rate of consumer spending: It was 1.2 percent in the first quarter, 5.1 percent in the fourth.

The quarter was the weakest since the final three months of 1991.

The department also said a big drop in exports caused the nation's merchandise trade deficit to shoot up 12 percent to $29.07 billion, the widest gap in more than four years.

Economic slowdowns for two key trading partners, Germany and Japan, are further dragging down the U.S. economy. Exports fell at a 2.6 percent annual rate while imports increased at a 12 percent rate.

Also crimping growth was government spending, down at a 7.3 percent annual rate. Military spending plunged 25.9 percent, the biggest drop since the government began tracking that category in 1972.

Housing was weak, too. Residential construction fell at a 0.2 percent annual rate, compared with a 25.1 percent surge in the fourth quarter. Economists expect a rebound in the second quarter.

But business investment in new equipment and machinery surged at a 16.5 percent annual rate, following a 14.5 percent increase in the fourth quarter.

The various changes added $11.7 billion to the GDP, bringing it to a seasonally and inflation-adjusted annual rate of $5 trillion.

by CNB