The nation's economy expanded at a brisk 3.9% pace in the fourth quarter, the Commerce Department said Friday-but not as rapidly as the sizzling 4.3% rate previously estimated.

The downward revision was led by trade. Exports were weaker than previously thought, though still up from the previous quarter. Meanwhile, there was a large upward revision in imports.

This pattern is expected to strengthen in coming quarters as a result of the Asian financial crisis and restrain the economy.

Inventory building was revised upward by $14 billion, to $74 billion, which Bruce Steinberg, chief economist at Merrill Lynch & Co., called "an unsustainable level." At the same time, domestic demand was revised down to a 2.1% rate of increase, the slowest pace in over a year.

Mr. Steinberg said he thinks the economy is about to slow sharply to a growth rate of "well under 2%" in the first quarter.

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