The US economy grew at a rate of 2.9% last year, Commerce reported Thursday, a high rate but close to the 3% target set by President Trump.
Last year's growth was the fastest gain for the economy since 2015. The economy was strongly boosted by the largest corporate tax cut in US history entering the economy. force last year, as well as additional government spending on military and national programs. But it is generally expected that these stimulus measures will erode later this year, which will slow down growth somewhat in 2019.
Growth in the last quarter of last year was 2.6%, above forecasts, but below 3.4% in the third quarter and 4.2% in the second quarter.
"Last year was probably the best year of this economic cycle," said Ellen Zentner, Chief Economist at Morgan Stanley. "We boosted the economy last year and these stimulus measures will fade this year."
Trump and his senior officials have repeatedly said that they can achieve an annual growth of at least 3% for the next decade, the president even declaring that it "could reach 4, 5 and can -being even 6% ".
The vast majority of economists predict that growth will be weaker this year. The US Federal Reserve is currently forecasting 2.3% growth in 2019. Fed Vice President Richard Clarida said Thursday morning that he was likely to lower it again because the winds contrary in Europe and China would probably slow US growth.
"Although my basic outlook for growth, employment and inflation is positive, a number of cross currents disrupting the economy need to be carefully considered," Clarida said, noting that some recent economic data was disappointing.
The Commerce Department had to delay the release of this report due to the partial closure of the government by many employees working on the collection and calculation of key economic data.
Consumer spending continues to fuel the economy as Americans open their portfolios on a wide range of purchases. Business investment also picked up in the last quarter of last year, a sign that companies are still hiring and investing, as they do not expect a recession on the horizon.
Intellectual property and equipment purchases increased particularly, but spending on residential housing declined 3.5%. The residential construction industry continued to struggle with rising interest rates deterring buyers and rising costs of some materials due to Trump's rates.
"The consumer tends to go down, even if his consumption remains strong. My main concern is the investment in housing, which fell for the fourth consecutive quarter, "said Constance Hunter, chief economist at KPMG. If this continues in 2019, it would be a worrying sign for future growth. "
Trade slowed growth at the end of last year, with imports largely outpacing exports, and Americans brought in more foreign products than they sold. Earlier in the year, it was urgent to sell soybeans and other US products to China before Trump's tariffs came into effect, but this trend has not reversed.
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