The Federal Reserve referred to the fourth-quarter slowdown Wednesday in a statement after a policy meeting. The U.S. economy appears to have "paused in recent months," the Fed said, mainly because of temporary factors. The central bank said growth would likely resume this year. But it reaffirmed its commitment to stimulating the economy by keeping borrowing costs low for the foreseeable future.Looming government cutbacks may already have hindered the economy: Concern over the year-end fiscal cliff could be one reason businesses slowed their restocking. And defense spending may have fallen as agencies prepared for automatic spending cuts. Congress managed to avert the fiscal cliff but only postponed the start of automatic spending cuts until March 1.
US Economy Shrinks 0.1 Pct., 1st Time In 3 Â½ Years
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts