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US economy slows in Q4

US economy slows in Q4

In its first official estimate, the US Commerce Department said that the country’s gross domestic product expanded at an annual rate of 1.9% in the fourth quarter from the previous three months. In the previous quarter, the US GDP growth came in at 3.5%. Analysts had anticipated a slowdown to 2.2%.

In the second quarter of 2016, the US economy grew at a 1.4% pace, while in the first quarter it expanded by 0.8%.

Compared to the prior year, the country’s economy advanced by 1.9%, while in 2015 the GDP growth stood at 2.6%.

Net exports subtracted 1.7 percentage points from expansion in the October – December period, marking the biggest decline since the second quarter of 2010. The US exports fell by 4.3%, while imports grew by 8.3%. Consumer spending, which account for almost 70% of the economy, grew at a 2.5% annualized rate in the fourth quarter. In the third quarter, the growth came in at 3%.

The core PCE, an indicator proffered by the Fed to measure inflation, was 1.3% in October-December after posting 1.7% in July-September.

Meanwhile, fixed-asset investment rose by 3.1%, for the first time in five quarters. The value of inventories jumped by $48.7 billion after rising by $7.1 billion in the third quarter.

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