GDP growth misses Trump's 3 percent target despite $1.5 trillion in tax cuts and a government spending blitz
WASHINGTON - The U.S. economy fell short of the Trump administration’s 3 percent annual growth target in 2018 despite $1.5 trillion in tax cuts and a government spending blitz, and economists say growth will only slow from here.
Gross domestic product increased at a 2.6 percent annualized rate in the fourth quarter after advancing at a 3.4 percent pace in the July-September period. Economists polled by Reuters had forecast GDP rising at a 2.3 percent rate in the fourth quarter. In addition, most manufacturing measures softened in January and February, and motor vehicle demand has eased.
Economists expect the longest shutdown in history will hurt growth in the first quarter. Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a still strong 2.8 percent rate in the fourth quarter. Consumer spending grew at a robust 3.5 percent rate in the third quarter.
The trade deficit widened further as a combination of the U.S.-China trade dispute, strong dollar and weakening global demand restrained export growth. The trade tensions also led businesses to hoard imports.
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