US economic growth revised slightly down in 2019

US economic growth revised slightly down in 2019

A woman counts US$100 bills at her home in Buenos Aires
A woman counts US$100 bills on Aug 28, 2018. (File photo: REUTERS/Marcos Brindicci)

WASHINGTON: U.S. economic growth slowed a bit more than previously estimated in 2019 as the sugar high from the Trump administration's US$1.5 trillion in tax cuts faded over the final year of a record-long expansion that came to an abrupt end in February in the face of the global coronavirus pandemic.

The Commerce Department said on Thursday gross domestic product increased 2.2per cent last year, revised down from the previously estimated 2.3per cent and also reflective of consumer spending that had begun to show signs of fatigue heading into 2020. The 2019 growth rate was the slowest expansion since 2016.

Though the updated data showed the massive fiscal stimulus lifted GDP to the White House's 3per cent target in 2018, growth fell shy of the 3.1per cent logged in 2015 under President Barack Obama.

President Donald Trump has repeatedly boasted about the economy, writing on Twitter in February, "BEST USA ECONOMY IN HISTORY!" On the campaign trail in 2016, Trump claimed he could boost annual GDP growth to 4per cent. Economists have always cautioned the economy did not have the capacity to grow 3per cent annually on a sustained basis because of low productivity among other factors.

The revision to 2019 growth came as GDP in the second quarter of that year was significantly cut, reflecting downgrades to consumer spending and business investment in equipment. Though growth in the second half was much stronger than previously reported, it was mostly driven by a shrinking import bill.

Growth in consumer spending was marked down through the last six months of 2019, indicating a loss of underlying economic strength even before the COVID-19 pandemic hit the United States' shores and tanked the economy in the first quarter of this year. The economy fell into recession in February.

The updated GDP data showed the economy growing at an average annual rate of 2.5per cent from 2014 to 2019, up from the previously reported 2.4per cent. When measured from the fourth quarter of 2014 to the fourth quarter of 2019, GDP increased at an unrevised average of 2.3per cent.

The saving rate was cut to 7.5per cent from 7.9per cent, with personal income lowered US$56.8 billion, or 0.3per cent in 2019. Corporate profits were raised US$175.9 billion, or 8.5per cent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Source: Agencies/ic