WASHINGTON (AFP, BLOOMBERG) - The US economy slowed sharply in the final three months of the year, due to a downturn in exports and more moderate consumer spending, which meant growth in 2016 was well below 2015, the Commerce Department reported Friday.
The first estimate of Gross Domestic Product - the value of all goods and services produced - showed the economy slowed, posting growth of 1.9 per cent in the September-December period, well below the 3.5 per cent pace of the third quarter,Commerce Department data showed Friday in Washington.
For the full year, the economy expanded 1.6 per cent, a full point below the pace of 2015 and the slowest pace since 2011.
Business investment picked up, which may be a harbinger for faster expansion in 2017. Consumer spending, the biggest part of the economy, rose 2.5 per cent, in line with projections.
The results cap growth of 1.9 per cent for the full year - near the average pace of the current expansion - and reinforce the leading role of household purchases while showing that businesses are starting to spend again. The strong job market and optimism among consumers and companies for President Donald Trump's policies are likely to keep growth humming along in 2017.
"The economy has strong underlying fundamentals," Ryan Sweet, a senior economist at Moody's Analytics, said before the report. "Growth should accelerate this year."
Economists' U.S. growth forecasts ranged from 1.7 per cent to 2.9 per cent.
The GDP estimate is the first of three for the quarter, with the other releases scheduled for February and March when more information becomes available.
Growth is seen at 2.3 per cent in 2017 and 2018, based on median projections in a Bloomberg survey earlier this month.