US Fourth Quarter GDP Growth revised down as economy loses steam at investing.com

Investing.com – The US economy grew less than expected in the fourth quarter, according to data published on Thursday, which highlighted the ongoing downturn that has widened to 2019.

The third estimate of the fourth quarter gross domestic product (GDP) showed that The economy grew at an annual rate, downward revised from a preliminary estimate of 2.6%, and a sharp decline from 3.4% reported in the third quarter last year.

Economists had expected growth of 2.4%.

United States futures turned negative after release, fell about 0.1[ads1]% across the board. US dollars responded briefly to big rivals, but quickly returned to levels seen just before the report.

Looking forward, economists expect growth to slow further in 2019 as the stimulus from a $ 1.5 trillion tax cut and increased government spending disappears. A trade war between the US and China, which weakens global growth and uncertainty over the UK's exit from the EU, suggests the outlook.

Joseph Brusuelas, chief economist at the accounting firm RSM US LLP, pointed to the softer dynamics of consumption and gross private investment, along with downward adjustments to real-time sales and gross domestic revenues.

"Everything reflects lowering general economic activity in December, which has been over in the current quarter," Brusuelas said.

Official forecasts indicate that it is getting worse in the short term. The latest central bank forecasts in Atlanta and New York show they expect growth in the first quarter to slow to around 1.2%.

The Federal Reserve reduced its forecast for growth in 2019 at its policy meeting earlier in March. It now expects GDP to grow 2.1%, instead of 2.3% as expected in December.

Following this meeting, the Fed chair Jerome Powell confirmed that "underlying economic fundamentals are still very strong", pointing to the labor market, rising incomes, low unemployment and strong business and confidence.