US GDP growth slowed to 2.6% Q4, bringing growth in 2017 to 2.3%

World
Europe

U.S. economic growth unexpectedly slowed in the fourth quarter as the strongest pace of consumer spending in three years resulted in a surge in imports.

Gross domestic product increased at a 2.6 percent annual rate also held back by a modest pace of inventory accumulation, the Commerce Department said in its advance fourth-quarter GDP report on Friday.

The economy grew at a 3.2-percent pace in the third quarter. Economists polled by Reuters had forecast the economy expanding at a 3.0-percent pace in the final three months of 2017.

A measure of domestic demand jumped at a 4.6-percent rate, the fastest since the third quarter of 2014, underscoring the economy’s strength. Final sales to private domestic purchasers rose at a 2.2-percent pace in third quarter.

Strong domestic demand is part of a synchronized global rebound that includes the euro zone and Asia. Demand has also been buoyed by President Donald Trump’s promise of hefty tax cuts, which was fulfilled in December when the Republican-controlled U.S. Congress approved the largest overhaul of the tax code in 30 years.

The economy grew 2.3 percent in 2017, an acceleration from the 1.5 percent logged in 2016. Economists expect annual GDP growth will hit the government’s 3-percent target this year, spurred in part by a weak dollar, rising oil prices and strengthening global economy.

Source(s): Reuters