Covering the Economy: BEA January 27 GDP Release: WSJ Friday Morning Roundup

Wall Street Journal morning news roundup:

WSJ.com - U.S. GDP Grew at 1.1% Rate As Consumer Outlays Slowed : A WALL STREET JOURNAL ONLINE NEWS ROUNDUP January 27, 2006 12:23 p.m.: The U.S. economy cooled during the final quarter of 2005 as consumers tightened their belts in the face of higher energy prices and the trade imbalance continued to damp growth. The Commerce Department reported Friday that gross domestic product, the broadest measure of U.S. economic output, rose at a seasonally adjusted 1.1% annual rate in October through December. The gain was slimmer than the third quarter's 4.1% increase, and marked the weakest quarterly showing since the final quarter of 2002, when GDP rose 0.2%. For all of 2005, GDP advanced 3.5%. It grew 4.2% in 2004 and 2.7% in 2003.

"While this was a disappointing report, there are signs of a very sharp rebound in GDP growth in the current quarter," economists at Morgan Stanley wrote in a note. Indeed, they wrote they now see a "very good possibility" the economy will grow at a 5% or better rate in the first quarter of 2006, versus their earlier estimate of 4.2% first-quarter growth.