(06-29) 10:15 PDT DETROIT (AP) —

United Auto Workers members have approved a contract agreement with auto parts maker Delphi Corp. that slashes wages and allows some plant closings but preserves jobs for thousands of workers.

The ratification comes after two years of often contentious negotiations and averts a threatened strike that would have crippled Delphi’s former parent, General Motors Corp.

Sixty-eight percent of the workers who voted were in favor of the new four-year pact, while 32 percent were against it, the UAW’s leadership said in a statement Friday.

About 17,000 workers at 17 Delphi facilities across the U.S. were eligible to vote on the deal, which allows some plant closings and cuts wages from $27 per hour for longtime workers to a pay range for everyone that runs from $14 to $18.50.

A total of 11,225 workers turned out for the vote, with 7,613 in favor and 3,612 voting against it, said a local union official who didn’t want to be named because the breakdown of the vote had not been released by the international union.

The pact will make Delphi more competitive as it tries to emerge from Chapter 11 bankruptcy protection, but it also clears the table for the UAW to concentrate on crucial contract talks later this summer with GM, Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

The agreement makes Delphi a much stronger company in the businesses it considers to be its core: Electronics, safety systems, heating and air conditioning systems, Cole said.

“I think Delphi is really poised to be a powerhouse, because they have a technology base that is really strong,” he said.

It also shows that the UAW is willing to bend to help companies that are struggling against lower-cost competitors, and that could be a big factor in talks with GM, Ford and Chrysler as they seek labor cost parity with Toyota Motor Corp. and Honda Motor Co., Cole said.

GM shares fell 38 cents to $37.77 in afternoon trading, while Ford shares slipped 6 cents to $9.43 and DaimlerChrysler’s U.S. shares rose $1.08 to $91.98.

WASHINGTON: The economy skidded to a near halt in the final quarter of last year, clobbered by dual slumps in housing and credit that caused people and businesses to spend and invest more sparingly.

The Commerce Department reported Thursday that the gross domestic product increased at a scant 0.6 percent pace in the October-to-December quarter. The reading Д unchanged from an initial estimate a month ago Д underscored just how much momentum the economy has lost. In the prior quarter, the economy clocked in at a brisk 4.9 percent pace.

Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the countrys economic health.

“The economy just kept its head above water,” said Nigel Gault, economist at Global Insight.

Economists had thought the newly released fourth-quarter GDP would have been bumped up to a 0.8 percent growth rate.

The housing picture looked even more bleak in the new report.

Builders slashed spending on housing projects by a whopping 25.2 percent on an annualized basis in the fourth quarter, the biggest cut in 26 years.

And, even though economic growth slowed, inflation picked up Д an ominous mix that could spell further trouble for the economy.

As if the newly confirmed fourth-quarter GDP figure of 0.6 percent wasnt chilling enough, the Labor Department reported Thursday that new applications for unemployment insurance benefits rose by 19,000 to 373,000 last week, more evidence that the general economic sluggishness is spilling over into the job market.

On Wall Street, the latest batch of economic news rattled investors. The Dow Jones industrials were down in morning trading.

Fears have grown that the country is heading for a recession or is already in one.

The National Association for Business Economics expects economic growth in the current January-to-March quarter to slow to a meager 0.4 percent pace. Some analysts believe the economys performance could be even worse and actually shrink during this period. Under one rough rule, the economy would have to contract for six months in a row for the country to be viewed as in a recession.

With risks lurking that the problems could intensify and further hurt the economy, Federal Reserve Chairman Ben Bernanke made clear he stands ready to lower a key interest rate again. The Fed, which started cutting interest rates to bolster the economy in September, has turned much more aggressively recently. In eight days in January, the Fed slashed rates by 1.25 percentage points Д the biggest one-month reduction in a quarter-century. Rates are expected to move lower at the Feds next meeting on March 18.

Bernanke, however, is hopeful that previous rate reductions and the $168 billion economic aid plan of tax rebates for people and tax breaks for business will energize the economy in the second half of 2008.

A gauge of inflation linked to the GDP report showed that “core” prices Д excluding food and energy Д grew at a rate of 2.7 percent in the fourth quarter. The inflation reading Д although unchanged from the governments initial estimate Д showed that inflation had picked up sharply from the third quarters 2 percent pace.

The inflation figure is above the Feds comfort zone Д the upper bound of which is a 2 percent inflation rate.

With inflation rising as the economy slows, fears are increasing that the country may be headed for a bout of stagflation. Thats a scenario the country hasnt experienced since the 1970s.

Even though Bernanke has made clear the Feds top priority Д for now Д is trying to get the economy back on track, he also says he remains mindful of inflation risks, especially from high energy prices.

Oil prices have reach new record highs, galloping past $100 a barrel in recent days. High energy prices can spread inflation by boosting the costs of a wide variety of other goods and services and can put a further damper on overall economic growth by crimping consumer spending.

Consumers boosted their spending at just a 1.9 percent pace in the fourth quarter. That was down slightly from the governments previous estimate and marked a pullback from the third quarters 2.8 percent growth rate. Consumer spending accounts for a big share of overall economic activity and thus is a major factor in how the economy fares.

Business spending on equipment and software grew at a 3.3 percent pace in the final quarter of last year. That was lower than the governments initial estimate and marked a deceleration from the third quarters 6.2 percent growth rate.

WASHINGTON: The economy skidded to a near halt in the final quarter of last year, clobbered by dual slumps in housing and credit that caused people and businesses to spend and invest more sparingly.

The Commerce Department reported Thursday that the gross domestic product increased at a scant 0.6 percent pace in the October-to-December quarter. The reading Д unchanged from an initial estimate a month ago Д underscored just how much momentum the economy has lost. In the prior quarter, the economy clocked in at a brisk 4.9 percent pace.

Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the countrys economic health.

“The economy just kept its head above water,” said Nigel Gault, economist at Global Insight.

Economists had thought the newly released fourth-quarter GDP would have been bumped up to a 0.8 percent growth rate.

The housing picture looked even more bleak in the new report.

Builders slashed spending on housing projects by a whopping 25.2 percent on an annualized basis in the fourth quarter, the biggest cut in 26 years.

And, even though economic growth slowed, inflation picked up Д an ominous mix that could spell further trouble for the economy.

As if the newly confirmed fourth-quarter GDP figure of 0.6 percent wasnt chilling enough, the Labor Department reported Thursday that new applications for unemployment insurance benefits rose by 19,000 to 373,000 last week, more evidence that the general economic sluggishness is spilling over into the job market.

On Wall Street, the latest batch of economic news rattled investors. The Dow Jones industrials were down in morning trading.

Fears have grown that the country is heading for a recession or is already in one.

The National Association for Business Economics expects economic growth in the current January-to-March quarter to slow to a meager 0.4 percent pace. Some analysts believe the economys performance could be even worse and actually shrink during this period. Under one rough rule, the economy would have to contract for six months in a row for the country to be viewed as in a recession.

With risks lurking that the problems could intensify and further hurt the economy, Federal Reserve Chairman Ben Bernanke made clear he stands ready to lower a key interest rate again. The Fed, which started cutting interest rates to bolster the economy in September, has turned much more aggressively recently. In eight days in January, the Fed slashed rates by 1.25 percentage points Д the biggest one-month reduction in a quarter-century. Rates are expected to move lower at the Feds next meeting on March 18.

Bernanke, however, is hopeful that previous rate reductions and the $168 billion economic aid plan of tax rebates for people and tax breaks for business will energize the economy in the second half of 2008.

A gauge of inflation linked to the GDP report showed that “core” prices Д excluding food and energy Д grew at a rate of 2.7 percent in the fourth quarter. The inflation reading Д although unchanged from the governments initial estimate Д showed that inflation had picked up sharply from the third quarters 2 percent pace.

The inflation figure is above the Feds comfort zone Д the upper bound of which is a 2 percent inflation rate.

With inflation rising as the economy slows, fears are increasing that the country may be headed for a bout of stagflation. Thats a scenario the country hasnt experienced since the 1970s.

Even though Bernanke has made clear the Feds top priority Д for now Д is trying to get the economy back on track, he also says he remains mindful of inflation risks, especially from high energy prices.

Oil prices have reach new record highs, galloping past $100 a barrel in recent days. High energy prices can spread inflation by boosting the costs of a wide variety of other goods and services and can put a further damper on overall economic growth by crimping consumer spending.

Consumers boosted their spending at just a 1.9 percent pace in the fourth quarter. That was down slightly from the governments previous estimate and marked a pullback from the third quarters 2.8 percent growth rate. Consumer spending accounts for a big share of overall economic activity and thus is a major factor in how the economy fares.

Business spending on equipment and software grew at a 3.3 percent pace in the final quarter of last year. That was lower than the governments initial estimate and marked a deceleration from the third quarters 6.2 percent growth rate.