US Economy Expands by 2.1% During the Fourth Quarter of 2019
The Bureau of Economic Analysis (BEA) estimated that the United States’ Real Gross Domestic Product (GDP) expanded by 2.1% for the fourth quarter of 2019, slightly above market expectations of 2%. Consumer spending continued to fuel the US economy in the final three months of 2019, however, at a slower pace than the previous quarter. Other factors contributing to the US economic expansion were the decline in imports, an acceleration in government spending and a slight improvement in exports. These positive contributions were offset by a large decline in business inventory which was impacted by the trade tensions. For the calendar year 2019, the US economy expanded at a slower pace of 2.3% relative to the 2.9% in 2018 and was lower than the 3% expansion promised by the Trump administration.
Despite the easing of the trade tensions between the US and China, there is still some level of uncertainty between the US and other trading partners as well as the upcoming US presidential elections and possible headwinds such as the coronavirus outbreak that could potentially lower the country’s rate of growth. For this reason, we believe that US GDP is likely to continue growing, however at a modest pace over the short to medium term.