- US gross domestic product grew at a pace of 2.6% in the fourth quarter, the Bureau of Economic Analysis said Thursday.
- The labor market was strong from October to December, but expectations for economic growth have dimmed.
- The report was delayed because of the government shutdown that ended in January.
The American economy expanded at a slower but still solid pace at the end of 2018, bringing growth for the year to just below the Trump administration’s goal of 3%.
Gross domestic product rose at an annualized rate of 2.6% from October through December, the Bureau of Economic Analysis said Thursday, above expectations for 2.2% growth. The economy grew at a pace of 2.9% in 2018, up from 2.2% in 2017.
Consumer spending, which accounts for about two-thirds of economic activity, slowed but still expanded by 2.8% in the fourth quarter. Business investment accelerated at a pace of 6.2%. GDP for the third quarter was unrevised at 3.4%.
“Growth probably will be revised higher, but the run of 3%-plus GDP prints is over,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.
The unemployment rate held near historic lows throughout the fourth quarter, and there were signs of upward pressure on wages. But expectations for growth have dimmed, with a series of data releases raising concerns about soft spots in the economy in recent weeks.
“A healthy labor market has typically been a strong signal for solid consumption and economic growth in the U.S., but weaker than expected retail sales data from December has cast doubts on how resilient the U.S. economy is from the weight of slowing global growth,” said Charlie Ripley, a senior investment strategist at Allianz Investment Management.
The release was delayed because of the partial government shutdown that ended in January, which shuttered agencies including the Commerce Department for five weeks.
“First and foremost we should also keep in mind that the data was delayed because of the government shutdown so there could be some noise in the number,” said Mike Loewengart, the head of investment strategy at E-Trade.
The nonpartisan Congressional Budget Office estimates the shutdown shaved about $3 billion, or 0.1%, from inflation-adjusted gross domestic product in the fourth quarter and about $8 billion, or 0.2%, from that of the first quarter of 2019.
Looking ahead, economists also think weaker global growth, fading stimulus, and trade tensions could continue to weigh on the outlook for the US.