Economy grew more slowly than first thought in Q4

WASHINGTON - The economy grew more slowly at the end of last year than first thought as state and local governments cut spending more deeply and Americans spent a tad less briskly.

The government says business activity increased at an annual rate of 2.8 percent in the October-December quarter. That was down from the initial estimate of 3.2 percent.

State and local governments, wrestling with budget shortfalls, cut spending at a 2.4 percent pace. That was much deeper than the 0.9 percent annualized cut first estimated and was the most since the start of 2010.

Consumers spending rose at a rate of 4.1 percent, versus the 4.4 percent first estimated. It was still the best showing since 2006.