US GDP Growth Revised Down to 2.2%


The US economy advanced an annualized 2.2 percent on quarter in the fourth quarter of 2018, well below a 2.6 percent growth in the previous estimate and 3.4 percent in the previous period. It compares with market expectations of 2.4 percent. Personal consumption expenditure and nonresidential fixed investment rose less than expected and public spending declined. On the other hand, the drag from net trade was smaller than anticipated as exports rose more and imports increased at a softer pace. Considering full 2018, the economy advanced 2.9 percent, the most since 2015, and above 2.2 percent in 2017.

Personal consumption expenditure (PCE) contributed 1.66 percentage points to growth (1.92 percentage points in the previous estimate) and rose 2.5 percent (2.8 percent in the previous estimate). Spending went up less for nondurables (2.1 percent compared to 2.8 percent) and durables (3.6 percent compared to 5.9 percent) and increased 2.4 percent for services, the same as in the previous estimate.

Fixed investment contributed 0.54 percentage points to growth (0.69 percentage points in the previous estimate) and rose 3.1 percent (3.9 percent in the previous estimate). Investment gained less than expected for equipment (6.6 percent compared to 6.7 percent) and intellectual property products (10.7 percent compared to 13.1 percent) and continued to decline for structures (-3.9 percent compared to -4.2 percent) and residential investment (-4.7 percent compared to -3.5 percent). 

The contribution from private inventories was 0.11 percentage points, below 0.13 percentage points in the previous estimate.

Exports increased 1.8 percent (1.6 percent in the previous estimate). Imports rose 2 percent (2.7 percent in the previous estimate). As a result, the impact from trade was -0.08 percent, compared to -0.22 percent in the previous estimate. 

Government spending and investment subtracted 0.07 percentage points to growth, compared to a 0.07 percent positive contribution in the previous estimate. It fell 0.4 percent, compared to a 0.4 percent increase in the previous estimate. Most likely, the partial shutdown which began on December 22nd and reduced services provided by the federal government, contributed to such a fall.

Considering full 2018, the economy advanced 2.9 percent, above 2.2 percent in 2017 and the highest growth rate since 2015. The biggest upward contribution came from personal spending (1.8 percentage points compared to 1.81 percentage points in the previous estimate), followed by fixed investment (0.9 percentage points compared to 0.91 percentage points); public expenditure (0.26 percentage poitns, the same as in the previous estimate); and inventories (0.12 percentage points, the same as in the previous estimate). On the other hand, net trade subtracted 0.21 percentage points to growth, compared to -0.22 percentage points in the previous estimate.

US GDP Growth Revised Down to 2.2%


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
3/28/2019 1:29:00 PM