WASHINGTON, Jan 31: US economic growth slowed to a crawl in the last quarter of 2002 as Iraqi war clouds, slumping stocks and job fears cramped spending, government figures showed on Thursday.

Gross domestic product — or total economic output — grew at a 0.7 per cent annualized pace, down sharply from 4 per cent growth in the previous three months.

“The lagging stock market, a lack of faith in corporate earnings reports and the looming threat of war with Iraq all combined to restrain economic growth in the fourth quarter,” said Wells Fargo chief economist Sung Won Sohn.

Growth in consumer spending, the biggest engine in the economy, slid to a near-decade low as purchases of new automobiles evaporated.

Spending by consumers rose 1 per cent, the smallest increase since early 1993, after 4.2 per cent growth the previous quarter.

Consumer concerns have been fed by sliding share prices with the Dow Jones index slumping nearly 17 per cent last year, and by employment with the jobless rate stuck at 6 per cent in December.

“With consumer spending the weakest in a decade, the lack of demand has businesses nervous about investing and hiring. This in turn has kept the job market in a holding pattern,” Sohn said.—AFP