GDP Rose 1.9% in Q4 2016, According to Early Estimate

UK plc only slowed slightly from the rate of 0.6 per cent in the previous two quarters
UK plc only slowed slightly from the rate of 0.6 per cent in the previous two quarters
Author

28 January, 2017

The median forecast in a Bloomberg survey called for 2.2 percent.

Residential construction, which had been falling for two quarters, rebounded in the fourth quarter, rising at an annual rate of 10.2 percent while government spending grew at a 1.2 percent rate as strength in state and local activity offset a drop in activity at the federal level.

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 rate of growth for the fourth quarter past year was the same as the previous quarter, showing no evidence of a United Kingdom slowdown, fears of which were heightened following the Brexit vote.

The fourth quarter figures mean GDP grew 2.0% in 2016, down fractionally from 2.2% in 2015.

The Commerce Department said the biggest factor contributing to the slowdown at the end of previous year was the nation's widening trade deficit.

On durable goods, the U.S. Department of Commerce showed that the headline report for new orders was down 0.4% in December, compared with a Bloomberg consensus estimate of 2.6%.

Darren Morgan, head of GDP at the ONS, commented: "The initial ONS data show the economy ended 2016 with steady growth of 0.6% for the third consecutive quarter".

Obama Frees Puerto Rican Terrorist
He was eventually sentenced to 55 years in prison, a sentence nearly 20 times longer than those handed down for similar offenses. Lopez-Rivera turned it down because he said it did not allow all of his co-defendants to get out of prison.

They also come as President Trump is vowing to at least double that rate of growth, as Republicans look to cut regulations and taxes in a bid to boost the private sector. In the third quarter, real GDP increased 3.5 percent.

The ONS said growth was "dominated by services" on the quarter. We believe improvements in these areas of the economy are likely to represent a more meaningful contribution to growth in 2018.

Consumer confidence and business investment posted signs of acceleration after Trump was elected on November 8.

Consumer spending is likely to feel squeezed and firms' investment intentions may well be dampened by uncertainty, resulting in a prolonged period of below trend growth.

The best year under Obama was 2015, when the economy expanded 2.6%.

He predicted an increase in business investment and exports and pointed out that an "incredible" supermarket price war was keeping living costs down for millions. Business investment increased only slightly, uplifted by the optimistic expectations from the Trump presidency, who was elected into office in the midst of the fourth quarter.

Excluding volatile food and energy prices, the so-called core PCE price index slowed to 1.3 percent from 1.7 percent in the third quarter.


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