The U.S. economy slowed to grow at a 1.9% annualized rate in the fourth quarter, the Commerce Department reported today. That’s down from the 3.5% growth rate for GDP in the third quarter. Economists surveyed by Bloomberg had forecast 2.2% growth.
For the full year the U.S. economy grew at a 1.9% rate as a 2% growth rate looks increasingly like the new normal.
There were some encouraging signs in today numbers. Consumer spending, which has hauled the burden of producing growth in the economy this year, continued to chug along recording a 2.5% annual growth rage. Business spending, which has lagged throughout the recovery, picked up with spending on equipment climbing 3.1% for the first gain in five quarters.
The U.S. trade deficit was a drag on growth with net exports subtracting 1.7 percentage points from growth in the quarter.
Government spending grew at a 1.2% rate as state and local outlays picked up. Spending at the federal level, however, dropped for the third quarter this year, falling at a 1.2% rate.
This was the last GDP report from President Obama’s watch on the U.S. economy. The first quarter report, to be delivered in April, will all go to the credit or blame of President Trump.
The yield on the 10-year U.S. Treasury dropped to 2.48% from 2.50% yesterday as bond price ticked higher. The dollar fell against the euro to $1.0696 to the euro from $1.0682 yesterday. U.S. benchmark West Texas Intermediate fell 0.61% to $53.17 to the barrel. International benchmark Brent crude fell 1.42% to $55.44 a barrel. Gold retreated 0.03% to $1189.40 as Chinese buying for gifts for the Year of the Rooster stopped as everyone traveled home to deliver presents. (All this data as of 2 p.m. New York time.)