In its first official estimate, the US Commerce Department said that the country’s gross domestic product expanded at an annual rate of 1.9% in the fourth quarter from the previous three months. In the previous quarter, the US GDP growth came in at 3.5%. Analysts had anticipated a slowdown to 2.2%.
In the second quarter of 2016, the US economy grew at a 1.4% pace, while in the first quarter it expanded by 0.8%.
Compared to the prior year, the country’s economy advanced by 1.9%, while in 2015 the GDP growth stood at 2.6%.
Net exports subtracted 1.7 percentage points from expansion in the October – December period, marking the biggest decline since the second quarter of 2010. The US exports fell by 4.3%, while imports grew by 8.3%. Consumer spending, which account for almost 70% of the economy, grew at a 2.5% annualized rate in the fourth quarter. In the third quarter, the growth came in at 3%.
The core PCE, an indicator proffered by the Fed to measure inflation, was 1.3% in October-December after posting 1.7% in July-September.
Meanwhile, fixed-asset investment rose by 3.1%, for the first time in five quarters. The value of inventories jumped by $48.7 billion after rising by $7.1 billion in the third quarter.