U.S. economic growth unexpectedly slowed in the fourth quarter as the strongest pace of consumer spending in three years resulted in a surge in imports.
According to the NYT, combined with a sinking jobless rate, a surging stock market, and a sunny outlook, the estimated overall 2.3 percent rise in the nation’s output last year is a sign of the American economy’s continuing resilience.
The economy grew at an annual rate of 2.6 percent in the final quarter of 2017, the government reported Friday, finishing off the year on a firm footing — though short of the heady 4 percent annual growth that President Trump has promised.
Imports, which subtract from GDP growth, increased at their fastest rate in more than seven years. Rising imports underscore the challenges that the Trump administration faces in its quest to boost annual GDP growth to 3 percent.
A measure of domestic demand jumped at a 4.6 percent rate, the quickest since the third quarter of 2014, highlighting the economy’s strength.
Final sales to private domestic purchasers rose at a 2.2 percent pace in the third quarter. A separate report from the Commerce Department on Friday showed orders for long-lasting manufactured goods soared 2.9 percent in December, the fastest pace since June and another sign of strength for American industry.
President Donald Trump’s move to cut taxes may give the economy an additional boost in 2018, though reaching his goal of sustained 3 percent GDP growth will prove challenging, in part because household purchases are projected to cool. Weak productivity and slow labor-force expansion will also pose hurdles in the longer term, and higher borrowing costs could crimp gains as well.
“The economy continues to hum along,” said the economist Ryan Sweet in an interview to Bloomberg. “This is far from doom and gloom. Businesses are investing aggressively, and consumers continue to spend at a very strong pace. We got a bit spoiled by three percent-plus growth in the last couple of quarters, but that streak was eventually going to come to an end.”
Although the figures released by the Commerce Department on Friday look backward, the nation’s economic dashboard indicates that the United States is poised for faster growth.
Proponents of the Republican tax overhaul say it will accelerate investment and spending in the year ahead. And the inventory declines that detracted from G.D.P. growth last quarter should be followed by a burst of spending.