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GDP growth misses Trump's 3% target



(Newser)

The US economy slowed in the last three months of last year to reach an annual growth rate of 2.6%, its slowest pace since the beginning of 2018, while the closure of the government and Other factors have had adverse consequences, according to the AP. "Softer but still strong", that's how the Wall Street newspaper characterizes the figure. Economists estimate that growth slowed further during the quarter. Growth in gross domestic product from October to December was lower than the 3.4% recorded in the third quarter, the Commerce Department said Thursday, citing slowing consumer spending. The 35-day government shutdown reduced the quarter's growth by about 0.1 percentage point. GDP growth for the entire year of 2018 is set at 2.9%, the best performance in three years since 2015, but, as CNBC notes, is just below the level of GDP. 3% goal of President Trump.

The current expansion, now 10 years old, is the second longest in US history. But it recorded the lowest annual growth rates of any post-war recovery, with growth averaging just over 2%. Trump has often referred to the low growth rates recorded during his 2016 presidential campaign, pledging to implement economic policies aimed at bringing growth to annual rates of 3% or more. CNBC sees in the impossibility of touching 3% the fact that Trump's policies "officially crashed into reality". In fact, private economists estimate that the 2.9% growth recorded last year could be the culmination of the economy for some time. Many are anticipating growth of 2.2% this year and even slower in 2020. According to some forecasts, the economy could tip into recession next year.

(Read more stories about GDP.)

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