Prospects for a recovery in U.S. corporate profits this year are dimming after third-quarter earnings growth slowed and the federal government's shutdown hindered trade and threatened to crimp consumer spending.

Earnings rose an estimated 1.4 percent for Standard & Poor's 500 Index companies last quarter, trailing gains of 3.8 percent in the previous three months and an average 10 percent over 15 years. Analysts have reduced the quarterly estimate by 75 percent since June, according to data compiled by Bloomberg.

Higher payroll taxes weighed on shoppers at retailers such as Wal-Mart Stores Inc., and industrial companies such as Caterpillar Inc. confronted slowing sales at a time when there was little room left to boost profit through cost-cutting. The two-week-old shutdown and impasse over increasing the U.S. Treasury's borrowing limit add to the risk of derailing an economic recovery whose bright spots include revivals in housing and for Detroit's automakers.