Trump crows about his economy, which is starting to slow

Screen Shot 2018 01 26

Screen Shot 2018 01 26

Gross domestic product grew at its fastest pace of the year, rising by 0.5 per cent from the previous three months.

Kristian Rouz - The Commerce Department reported Friday that U.S. economic growth slowed to an annualized 2.6 percent last quarter, compared to an expansion of 3.2 percent in Q3, and 3.1 percent in Q2.

It's a far cry from Trump's breathless prediction of 6% GDP growth in December, or even Breitbart's giddy coverage of the New York Fed prediction of 3.9% final-quarter growth. "The TCJA is expected to provide a modest boost to the US economy over the next few years".

That comparison is significant since 2012 was the year in which the eurozone debt crisis was at its most intense and in which there were, before the glorious London Olympics, fears that the United Kingdom was about to suffer a "double dip" recession.

Overall, the economy saw a 2.3 percent increase in 2017, following a trend of stable growth over the past several years, according to the Washington Post.

Analysts speculate that the tax cuts will help boost the USA economy in the short term, but even then, GDP growth won't match White House projections.

Speaking at the World Economic Forum in Davos, Switzerland, President Donald Trump, the first sitting US president to address the forum in more than a decade, talked up the strength of the world's leading economy, pointing to new wealth generation, increased business confidence and a stock market that continues to set records.

Trump's economy also faces challenges from the Federal Reserve, which is slowly unwinding the extraordinary efforts it undertook over the past decade to stimulate growth.

But many believe 2018 will again be better than the 2% pace that has prevailed since the recession ended.

Because the Bank of England is obliged to get inflation down to the 2 per cent mark trading in the City now forecasts the next interest rate rise will take be in August.

USA gross domestic product, the value of every thing and service created domestically, rose at a 2.6% annualized rate in the fourth quarter.

Business and government spending were also encouraging.

Consumer spending rose at a 3.8% rate in the period, an increase last exceeded in late 2014. That likely reflects, in part, Americans buying new cars and other goods to replace items damaged in the storms. Growth was partly driven by the strongest holiday shopping season in several years, according to data from Mastercard SpendingPulse.

"The increase in real GDP in 2017 primarily reflected positive contributions from personal consumption expenditures (PCE), non-residential fixed investment, and exports".

Whether that growth continues, however, will be influenced by many factors outside Trump's control. The measure gives a better sense of underlying domestic demand. Core prices - which exclude food and energy - rose at 1.9% rate. The expansion is now in its ninth year and is poised to become the country's second-longest on record later in 2018.

However, the Office for National Statistics said the big picture remained one of a slower and more uneven expansion in the world's sixth-biggest economy.

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