Business

US economy grew at 2.1% in Q4

WASHINGTON The US economy grew slightly faster in the last three months of last year than originally reported, but still experienced a significant slowdown, the Commerce Department reported yesterday.

An uptick in consumption and business inventory investment saw the final estimate for fourth quarter GDP growth rise to 2.1 per cent.

This is an upward revision of 0.2 points from the last report. Analysts had been expecting a revision of only a tenth of a point.

Falling exports and declining spending by the federal government nevertheless put fourth quarter growth well below the July-September period, which saw brisk expansion of 3.5 per cent.

For all of last year, the economy grew 1.6 per cent, the slowest pace since 2011. That figure was unchanged from the previous report. The GDP figures are revised multiple times as more comprehensive data becomes available.

The upward revision for the final quarter was driven in part by a stronger personal consumption spending, which grew 3.5 per cent compared with the third quarter, 0.5 points higher than the prior estimate.

However, the drag on growth from falling net exports in the quarter was the heaviest recorded since 2004, subtracting 1.8 per cent from GDP in the quarter.

While the US has seen a steady recovery since the Great Recession of 2008, it has also been among the slowest compared with previous post-crisis periods, as an ageing labour force and higher savings rates have dampened growth.

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