Economy grew in Q4 on slower but solid consumer spending

Donald Trump to sign revised agreement with Mexico, Canada

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The economy grew solidly late last year as a modest gain in consumer spending and a narrower trade deficit offset persistently sluggish business investment and stockpiling.

The nation’s gross domestic product – the value of all goods and services produced in the U.S. – increased at a seasonally adjusted annual rate of 2.1% in the October-December period, matching the third quarter pace, the Commerce Department said Thursday. Economists forecast a 2.2% gain.

Consumer spending slowed after six months of brisk growth but continued to boost growth. Business investment, which has been hobbled by trade fights, feeble growth overseas and resulting weakness in manufacturing, fell for the third straight month. 

For all of 2019, the economy throttled back after federal tax cuts and spending increases juiced growth the prior year but still grew a sturdy 2.3%. In 2018, growth was 2.9%, near President Trump’s target of at least 3% gains. Yet that seems to have been a high-water mark and Trump appears likely to fall short of his goal of sustaining such advances over several years.

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