The U.S. economic growth rate was 2.6 percent in the last quarter of 2018, which is significantly lower than the growth rates in the earlier quarters, the government said.
For the whole 2018, the economy grew 2.9 percent, a little below the Trump administration’s 3% target.
The economist Sung Won Sohn said that the economy lost some altitude in the last quarter of 2018 but “it is not about to crash.” He added that “flight path ahead looks quite safe.”
The release of the fourth quarter growth rate which was delayed by the government shutdown was higher than what many economists had predicted. The growth was boosted by a big (6.2%) increase in business investment spending.
Trump administration officials consider the bigger-than-expected numbers as a sign of the success of the president’s economic agenda.
Commerce Secretary Wilbur Ross said that the “America First agenda that prioritizes American jobs, American workers, and American industry” “has revitalized the American economy.”
Economists were less enthusiastic in their reaction because the economy was “not so bad in the final months of last year’ according to Mark Hamrick, senior economic analyst at Bankrate.com.
The numbers clearly show a growth softening for the year from 4.2 percent during the second quarter. Many economists attributed the strong growth to the 2017 tax cuts.
Then, growth slowed to a 3.4 percent rate in the third quarter and continued to slow until the end of the year.
Many economists predict a lower economic growth rate in 2019, because of the decreasing benefits of the tax cuts and the weakness in Europe. The Federal Reserve sees a 2.3 percent growth this year.