Economic growth in the U.S. slowed by more than anticipated in the final three months of 2016, according to a report released by the Commerce Department on Friday.
The Commerce Department said gross domestic product increased by 1.9 percent in the fourth quarter following a 3.5 percent jump in the third quarter. Economists had expected GDP to climb by 2.2 percent.
However, Rob Carnell, Chief International Economist at ING Commercial Banking, said the two quarters taken together suggest the economy picked up momentum in the second half of the year.
The bigger than expected slowdown in the pace of GDP growth was partly due to the impact of trade amid a sharp pullback in soybean exports.
The report showed a downturn in exports along with an acceleration in imports, which are a subtraction in the calculation of GDP.
Exports tumbled by 4.3 percent in the fourth quarter after jumping by 10.0 in the third quarter, while imports surged up by 8.3 percent following a 2.2 percent increase in the previous quarter.
Trade subsequently reduced GDP by 1.70 percentage points in the fourth quarter after contributing 0.85 percentage points in the third quarter.
Meanwhile, a continued increase in consumer spending contributed to GDP growth in the fourth quarter, although the pace of spending growth slowed to 2.5 percent from 3.0 percent.
The Commerce Department said the increase in GDP also reflected positive contributions from private inventory investment, residential fixed investment, non-residential fixed investment, and state and local government spending.
A reading on core consumer prices, which exclude food and energy prices, showed that the pace of price growth slowed to 1.3 percent in the fourth quarter from 1.7 percent in the third quarter.
by RTT Staff Writer
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