US economy slowed more than initially thought in the 4th quarter, keeping growth in 2018 below the Trump admin.'s 3% annual target.
Visitors walk through the newly opened luxury shopping mall at the Hudson Yards in New York on March 18, 2019.Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.The U.S. economy slowed more than initially thought in the fourth quarter, keeping growth in 2018 below the Trump administration's 3 percent annual target, and corporate profits failed to rise for the first time in more than two years.
The revisions to the fourth-quarter GDP reading reflected markdowns to consumer and business spending, as well as government outlays and investment in homebuilding. Trump likes to showcase the economy as one of the biggest achievements of his term, declaring last July that his administration had"accomplished an economic turnaround of historic proportions." On the campaign trail, Trump boasted he could boost annual GDP growth to 4 percent, a goal analysts always said was unrealistic given low productivity, among other factors.
That was underscored by weak profits in the fourth quarter. After tax corporate profits were unchanged for the first time since the third quarter of 2016, after growing at a 3.5 percent rate in the third quarter. A profit measure that corresponds to S&P 500 profits fell $34.2 billion in the fourth quarter.
Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 2.5 percent rate in the fourth quarter instead of the previously reported 2.8 percent pace. Consumer spending remains underpinned by a strong labor market.
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