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GDP Growth Slides Back Under 3%

That's the benchmark Trump wants, but 2018 falls just short
By Newser Editors and Wire Services
Posted Feb 28, 2019 10:40 AM CST
An assembly line at a General Motors auto plant in Arlington, Texas.   (AP Photo/LM Otero, File)

(Newser) – The US economy slowed in the final three months of last year to an annual growth rate of 2.6%, the slowest pace since the beginning of 2018, as the government shutdown and other factors took a toll, per the AP. "Softer but still solid" is how the Wall Street Journal characterizes the figure. Economists believe growth has slowed even more in the current quarter. Growth in the gross domestic product in the October-December quarter was down from a 3.4% gain in the third quarter, the Commerce Department reported Thursday, citing slower consumer spending as the biggest factor. The 35-day government shutdown shaved an estimated 0.1 percentage point from growth in the quarter. GDP growth for all of 2018 came in at 2.9%, the best showing in three years since 2015, but, as CNBC notes, just under President Trump's goal of 3%.

The current expansion, now in its 10th year, is the second longest in US history. But it has featured the weakest annual growth rates of any recovery in the post-World War II period, with growth averaging just above 2%. Trump often cited the weak growth rates during his 2016 presidential campaign, pledging to implement economic policies to boost growth to annual rates of 3% or better. CNBC sees the failure to hit 3% as a sign that Trump policies "officially crashed into reality." In fact, private economists believe that the 2.9% growth seen last year may represent the economy's high point for some time. Many are forecasting growth this year will slow to around 2.2% and slow even more in 2020. Some forecast the economy could dip into recession next year.

(Read more GDP stories.)

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