Measured from the fourth quarter of 2018 to the fourth quarter of 2010 real GDP increased 2.3 percent during the period, down from 2.5 percent a year prior.
In the final three months of the year, U.S. gross domestic product rose 2.1 percent, the same pace as in the third quarter and better than economists had forecast. That matched the median forecast among economists, as examined by Refinitiv, also has been stable in the 2.1 percent rate in the next quarter. Residential construction outlays increased at a 5.8 per cent rate, the strongest in two years and following a 4.6 per cent advance in the third quarter.
Trade actually contributed to growth in the fourth quarter as imports, which subtract from US growth, fell much faster than exports.
But the longest expansion in history, now in its 11th year, probably remains on track and a downturn is unlikely as the Federal Reserve's three interest rate cuts in 2019 kick in. U.S. Treasury prices were trading higher. -China trade war - and declining business investment. Fed Chair Jerome Powell told reporters the USA central bank expected "moderate economic growth to continue" but also nodded to some risks, including the recent coronavirus outbreak in China.
For the fourth quarter, consumer spending, which accounts for 70 percent of economic activity, slowed to an annual gain of 1.8 percent.
This is the government's first estimate of Gross Domestic Product for the fourth quarter. This measure of domestic demand rose at a 2.3% pace in the third quarter. Most alarmingly, businesses have been sharply reducing their investment as Trump's ongoing trade fights have heightened uncertainty for corporations. Overall economic output rose by 2.3% in the fourth quarter from a year earlier. "The boost from net trade in Q4 won't likely be repeated, but neither will an offsetting sharp slowing in the pace of inventory accumulation".
However, growth is slowing as momentum wanes due to massive tax cuts by the White House and Republicans in 2018. Economists have long disagreed and pointed to structural problems such as low productivity and population growth. The housing market is also rebounding, thanks in part to low interest rates. Investment in equipment declined nearly 3% and spending on structures like oil rigs tumbled 10% in the fourth quarter.
Powell said newly signed trade pacts with China, Canada and Mexico could give businesses more confidence to invest in the new year. Boeing on Wednesday reported its first annual loss since 1997.
Though a separate report from the Labor Department on Thursday showed the number of Americans filing claims for state unemployment benefits fell last week, the tight labor market is not generating a faster pace of wage growth. But economists see this trend as only temporary: Many U.S. businesses had accelerated their pace of imports in the July-September quarter to get ahead of an expected increase in Trump's import taxes. That led to trade adding 1.48 percentage points to fourth-quarter GDP growth, the most since 2009.
Business stockpiling subtracted a full percentage point to growth, with part of that blamed on the General Motors strike that cut into auto inventories.
Private inventories subtracted 1.09 percentage points from GDP growth in the fourth quarter, after cutting 0.03 in the third quarter and 0.91 in the second.