WASHINGTON–The U.S. economy slowed down in the final quarter of 2018 and could slow further this year, according to new federal data and analyst forecasts.
Data released by the Commerce Department shows U.S. gross domestic product grew at a 2.6% annual rate in Q4, significantly slower than mid-year 2018 when GDP growth was above 4% (a figure boosted by tax cuts).
Many economists are projecting growth to drop below 2% in the first quarter, in part because of the partial government shutdown, which began in December and extended through most of January, the New York Times reported.
The government shutdown also played a role in delaying the release of the GDP numbers by a month.
Maintaining Perspective
“It’s important to keep the cooling economy in perspective,” the Times report stated. “The fourth-quarter slowdown wasn’t as severe as many forecasters had feared, and even with the loss of momentum late in the year, 2018 as a whole was the best year of the decade-long recovery from the Great Recession. And most economists do not expect a recession this year, putting current expansion on track to become the longest on record.”
According to the Commerce Department, economic output was up 3.1% in the fourth quarter from a year earlier.
It should be noted the Commerce Department will revise its fourth-quarter estimate in March.