US GDP Growth Lower than Expected in Q4


The US economy expanded an annualized 2.6 percent on quarter in the last quarter of 2017, below 3.2 percent in the previous period and market expectations of 3 percent, the advance estimate from the BEA showed. Consumer spending rose the most in six quarters and residential investment rebounded while inventories weighed down on the growth and a surge in imports brought the net trade contribution to negative. Considering full 2017, the economy expanded 2.3 percent, higher than 1.5 percent in 2016.

Personal consumption expenditure (PCE) contributed 2.58 percentage points to growth (1.49 percent in the previous period) and rose 3.8 percent (2.2 percent in the previous period). Faster increases were seen for services (1.8 percent compared to 1.1 percent in the previous period); durables (14.2 percent compared to 8.6 percent) and nondurables (5.2 percent compared to 2.3 percent).    

Fixed investment added 1.27 percentage points to growth (0.4 percentage points in the previous period) and increased 7.9 percent (2.4 percent in the previous period). Investment rebounded for residential (11.6 percent compared to -4.7 percent in the previous period) and structures (1.4 percent compared to -7 percent) and rose faster for equipment (11.4 percent compared to 10.8 percent). On the other hand, a slowdown was seen for intellectual property products (4.5 percent compared to 5.2 percent). 

Private inventories subtracted 0.67 percentage points from growth, compared to +0.79 percent in the previous period. 

Meanwhile, exports jumped 6.9 percent (2.1 percent in the previous period) and imports surged 13.9 percent, after falling 0.7 percent in the previous period. As a result, the impact from trade was -1.13 percent from +0.36 percent in the previous period.

Government spending and investment added 0.5 percentage points to growth, compared to 0.12 percentage points. It increased 3 percent, compared to 0.7 percent. 

 US GDP Growth Lower than Expected in Q4


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
1/26/2018 2:42:07 PM