The U.S. economy slowed less than expected in the fourth quarter amid solid cons...
WASHINGTON - The U.S. economy slowed less than expected in the fourth quarter amid solid consumer and business spending, leaving 2018 growth just shy of the Trump administration’s 3 percent annual target.
Gross domestic product increased at a 2.6 percent annualized rate in the fourth quarter after expanding at a 3.4 percent pace in the July-September period. The economy grew 2.9 percent in 2018, powered by the White House’s $1.5 trillion tax cut and increased government spending. It was the best performance since 2015 and better than the 2.2 percent logged in 2017.
The economy is slowing as the boost from fiscal stimulus fades. Growth is also being restrained by a trade war between the United States and China. The dollar trimmed losses against a basket of currencies on the GDP data, while U.S. Treasury yields rose. U.S. stock index futures slightly pared losses.The fourth-quarter GDP report was delayed by a 35-day partial shutdown of the government that ended on Jan. 25, which affected the collection and processing of economic data.
Trade tensions with China could constrain the economy for a while. U.S. Trade Representative Robert Lighthizer told lawmakers on Wednesday that Washington’s issues with China were “too serious” to be resolved with promises from Beijing to buy more American goods and a threat of higher tariffs could loom over trade with China for years.
This accelerated inventory accumulation, which offset some of the drag on GDP growth from the trade deficit.
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