The US economy grew steadily in the final quarter of 2019, continuing the country’s longest economic expansion on record even against the backdrop of the Trump administration’s trade war with China.
Gross domestic product rose at a 2.1 per cent annualised rate in the final three months of 2019, according to the first estimate from the Bureau of Economic Analysis, released on Thursday. That matched the median forecast among economists, as surveyed by Refinitiv, and was steady from the 2.1 per cent pace in the third quarter.
For 2019, though, the economy expanded 2.3 per cent, its slowest annual pace of growth since 2016.
“In the fourth quarter, a downturn in imports, an acceleration in government spending, and a smaller decrease in nonresidential investment were offset by a larger decrease in private inventory investment and a slowdown in [personal consumption expenditures]”, the BEA said on Thursday.
Interest rates
The data comes a day after the Federal Reserve stood pat on interest rates at its first policy meeting for 2020 and chairman Jay Powell characterised the economy as "in a good place". The central bank cut interest rates three times in 2019, but indicated last year it would probably leave its benchmark borrowing rate unchanged this year.
The Fed yesterday made one change in its policy statement, describing growth in household spending as “moderate,” rather than “strong,” as they had last month. The consumer has long been held up as the star of the US economy’s expansion. – Copyright The Financial Times Limited 2020.
