U.S. fourth-quarter GDP revised down; corporate profits fail to rise GlobeBusiness
The U.S. economy slowed more than initially thought in the fourth quarter, keeping growth in 2018 below the Trump administration’s 3 per cent annual target, and corporate profits failed to rise for the first time in more than two years.
For all of 2018, the economy grew 2.9 per cent as previously reported, despite the White House’s fiscal stimulus of $1.5-trillion in tax cuts and more government spending. Growth last year was the strongest since 2015 and was an acceleration from the 2.2 per cent logged in 2017. Economists polled by Reuters had forecast GDP in the fourth quarter being revised down to a 2.4 per cent.
These contributed to the Federal Reserve’s decision last week to bring its three-year campaign to tighten monetary policy to an abrupt end. The U.S. central bank abandoned projections for any interest rate hikes this year after increasing borrowing costs four times in 2018. Investment in residential construction was revised to show it contracting at 4.7 per cent rate instead of at a 3.5 per cent rate, marking the fourth straight quarterly decline.
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