The U.S. economy probably slowed in the fourth quarter, held back by softer cons...
WASHINGTON - The U.S. economy probably slowed in the fourth quarter, held back by softer consumer spending and weak exports, which could leave 2018 growth just shy of the Trump administration’s 3 percent annual target.
Trump has touted the economy as one of the biggest achievements of his presidency and declared last July that his administration had “accomplished an economic turnaround of historic proportions.” The Atlanta Federal Reserve is projecting GDP grew 1.8 percent in the October-December quarter, which would be the slowest in nearly two years. Economists are forecasting that the economy grew about 2.9 percent in 2018, which would the best performance since 2015 and better than the 2.2 percent logged in 2017.
The slowdown will come at time when the economy’s outlook is also being clouded by signs of cooling global demand and uncertainty over Britain’s departure from the European Union. These factors support the Federal Reserve’s “patient” stance towards raising interest rates further this year. Fed Chairman Jerome Powell reaffirmed the U.S. central bank’s position in his testimonies before lawmakers on Tuesday and Wednesday.
The trade dispute has combined with a strong dollar and weakening global demand to undercut export growth. It also led cautious businesses to hoard imports, causing the trade deficit to widen. But the inventory boost would come at the expense of growth in the first quarter, which is already looking soft with most manufacturing measures weakening in January and February.
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