New York: Copper fell on Friday, snapping four days of gains, on renewed concern demand will drop as fresh data showed the global recession is deepening.

The US economy shrank in the fourth quarter at the steepest rate since 1982, the Commerce Department said Friday. Consumer spending fell at the fastest pace in almost 30 years. Japan's manufacturers cut production by a record in January and economic growth slowed in India and Malaysia last quarter. Copper fell as much as 6.5 per cent.

"People will see the world really continue to suffer from the slowdown for some time," said Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York. "Copper will really break down."

Copper futures for May delivery slipped 2.7 cents, or 1.7 per cent, to $1.552 (Dh5.7) a pound on the New York Mercantile Exchange's Comex division. A close at that price still would leave the metal up 8.3 per cent for the week.

The revised 6.2 per cent drop in US gross domestic product, on an annual basis, took analysts by surprise.

The contraction was estimated to be 5.4 per cent, the median projection of 74 economists surveyed by Bloomberg News.

Consumer spending tumbled at a 4.3 per cent annual pace last quarter, the sharpest rate of decline since 1980, after falling at a 3.8 per cent rate the previous three months. That marks the first back-to-back decreases of more than 3 per cent since record-keeping began in 1947.

Before Friday, copper had jumped 10 per cent this week on renewed investor optimism as governments planned spending to stimulate the US, Chinese and European economies.

Friday's US economic data was "a wake up call for those expecting a recovery in 2009," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd in New York, said in an email. Copper has plunged 60 per cent in the past 12 months as slumping housing markets, mounting job losses and declining manufacturing strangled global economic growth.

The metal will average $1.275 a pound this year as production outpaces demand, Deutsche Bank AG forecasts. That's 60 per cent lower than last year's average price of about $3.18 in New York.

"We believe copper is the most exposed of the industrial metals in an environment where real-economy data deteriorates further," analysts at Deutsche said in a report.

Confidence among US consumers fell for the first time in three months in February, the Reuters/University of Michigan index showed.

US business activity contracted in February for a fifth consecutive month, the Institute for Supply Management-Chicago Inc said.