WASHINGTON, (Reuters) – – The US economy delayed more than originally thought in the fourth quarter, and continued to grow in 2018 under the Trump administration's 3 percent annual target, and the company's profits failed to rise for the first time for more than two years.
FILE PHOTO: Technicians build LEAP jetliner engines at a new, highly automated General Electric (GE) factory in Lafayette, Indiana, USA March 29, 2017. REUTERS / Alwyn Scott / File Photo
Gross Domestic Product Increased on a 2 , 2 percent annual rate, said the Department of Commerce Thursday in its third reading of the fourth quarter GDP growth. It was down from the 2.6 percent pace calculated in February.
The economy grew by 3.4 percent in the third quarter. The extension will be the longest on record in July.
The audits of the fourth quarter's GDP reading reflected markdowns on consumer and business expenses, as well as government spending and housing construction investments.
For the whole of 2018, the economy increased 2.9 percent as previously reported, despite the White House's fiscal stimulus of $ 1.5 trillion in tax deductions and more public spending. Last year's growth was strongest since 2015 and was an acceleration from 2.2 per cent registered in 2017.
Compared with the fourth quarter of 2017, the economy increased 3.0 per cent, revised from 3.1 per cent reported last month. President Donald Trump has highlighted this year's growth figure as evidence that fiscal stimulants, which have contributed to the swelling of the federal deficit, have put the economy on a sustainable path of strong growth.
Trump likes to showcase the economy as one of the greatest achievements of his period, and in July stated that his administration had "achieved an economic reversal of historical proportions." On the battle track, Trump jumped he could increase annual GDP growth to 4 percent, a target analyst said always was unrealistic given low productivity, among other things.
Economists asked by Reuters had forecast GDP in the fourth quarter revised down to 2.4 percent.
There are signs that growth in growth continued early in the first quarter, with the retail sector growing modestly and producing production and homebuilding lukewarm.
It was underlined by weak profits in the fourth quarter. After tax, the company's profit was unchanged for the first time since the third quarter of 2016, having grown by 3.5 per cent in the third quarter. A way of profit that corresponds to S & P 500 profit decreased by NOK 34.2 billion in the fourth quarter.
The economy is facing headwinds from the fake stimulus, slowing global growth, Washington's trade war with China, and uncertainty over Britain's departure from the EU.
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 US Federal Reserve left forecasts for interest rate hikes this year after rising borrowing costs four times in 2018.
Growth in consumer spending, which accounts for more than two-thirds of US economic activity, increased by 2.5 percent in the fourth quarter instead of previously, 2.8 percent reported the pace. Consumer spending is still underpinned by a strong labor market.
The growth in corporate spending on equipment was revised to a 6.6 percent pace from a 6.7 percent interest rate. The investment in intellectual products was lowered to a 10.7 percent interest rate from the 13.1 percent pace reported in February.
Investment in housing construction was revised to show that there was a 4.7 percent contract, instead of 3.5 percent, and the fourth quarterly decline in the quarter.
Public investment fell by a 0.4 percent interest rate, instead of growing at a 0.4 percent rate as previously reported.
But exports were revised to show that they increased by 1.8 percent pace instead of 1.6 percentage points reported last month. Imports were revised, leading to a smaller trade deficit which reduced one-tenth of a percentage point from fourth-quarter GDP growth.
The trade deficit was previously estimated to have deducted 0.2 percentage point from production. Inventories increased by $ 96.8 billion in the fourth quarter instead of the $ 97.1 billion reported last month.
Investment investments added a tenth of a percentage point to GDP growth last year, as projected last February.
Reporting by Lucia Mutikani; Editing by Andrea Ricci