US Q4 GDP up 2.2% and falls below expectations
Despite a rise in the US Q4 GDP, the economy's growth was worse-than-expected.
The final reading of the US Q4 2018 gross domestic product (GDP) from the US Commerce Department shows that the GDP grew 2.2%. The statistic is less than the 2.9% expected from financial experts.
US Q4 GDP: key figures
| Residential investment | -4.7% |
| Business fixed investment | +5.4 % |
| Exports | +1.8% |
| Imports | +2% |
Why did the US Q4 GDP fall?
While the first reading of the US Q4 GDP showed improvement, the third and final revision from the Commerce Department shows that the US economy is experiencing a slight slowdown. Business fixed investment increased overall, but was still revised down to 3.1%. Consumer spending was also revised down in the final report to 2.5% from 2.8%. Residential investment plummeted by 4.7%. Exports increased as the trade deficit is narrowing in 2019. Imports grew as well, but had to be revised down in the wake of current US-China trade concerns.
How will the US Q4 GDP affect the economy?
Bob Iaccino, founder of Path Trading Partners, said that the final reading of the US Q4 GDP doesn’t mean that the nation is going to experience a recession and said the word ‘shouldn’t be used flippantly.’ However, he feels that the economy is definitely having a 'slowdown, no question.’
‘The latest revision of the GDP is decidedly weak,’ added Iaccino.
Iaccino also noted that if Q1 2019 GDP growth slows, it will be hard to get to 3% growth for the economy. He also said that the lower-than-expected GDP statistics would affect US President, Donald Trump, who has been touting the success of the US economy.
‘Trump wanted 3% growth [from GDP statistics,]’ said Iaccino.
Iaccino also believes that even with the rise of the GDP and possibly positive US-China trade talks, it would take two quarters for those results to increase economic growth.
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