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The U.S. economy grew at a solid 2.6% rate in the final quarter of last year, helped by the most accelerated consumer spending since the spring of 2016 and a huge…
The U.S. economy grew at a solid 2.6% rate in the final quarter of last year, helped by the most accelerated consumer spending since the spring of 2016 and a huge recovery in home construction.
The quarterly advance in gross domestic product, the nation’s total output of goods and services, followed gains above 3% in the second and third quarters, the Commerce Department said Friday. The slowdown in the October-December period reflected a worsening trade deficit and less growth in inventory restocking by companies.
For 2017, the economy grew 2.3%. That’s a significant improvement over 2016’s 1.5% gain, but little changed from the modest 2.2% average growth rate recorded since the end of the Great Recession in June 2009.
Economists expect even stronger growth this year, boosted by the $1.5 trillion tax cut that U.S. President Donald Trump signed into law in December. The Trump administration claimed that its program of tax cuts, deregulation and stricter enforcement of trade laws is going to lift growth to sustainable rates of 3% or more in the coming years.
Trump has said his plan will serve as «rocket fuel» for the economy, encouraging Americans to spend more and businesses to increase investments.
Many economists, however, say the boost will be short-lived.
«Deficit-finance tax cuts will provide short-term stimulus for the economy, but that will be temporary, because we are at full employment beforehand and the Fed will respond by raising interest rates more aggressively,» warned Mark Zandi, chief economist for Moody’s Analytics.
Michael Pearce, economist for Capital Economics, stressed that the increase in imports that increased the trade deficit reflected an adjustment for port disruptions caused by hurricanes in the third quarter and added that he expects solid growth in the coming quarters.
Source: Actualidad
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