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
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