US economy grew more slowly in 2018 than previously estimated

(ABNA24.com) The US government says the economy grew more slowly in 2018 than it previously estimated, downgrading its estimate from 3% to 2.5%. President Donald Trump had frequently boasted of the 3% growth figure as evidence that his policies invigorated the economy.

The US Commerce Department lowered its estimate of growth from the fourth quarter of 2017 to the fourth quarter of 2018 mainly because businesses spent less on buildings, equipment and software than it had earlier thought.

The department made the change based on more comprehensive data as part of its annual revisions to gross domestic product, or GDP, the broadest measure of the nation's output of goods and services. The revisions cover the five years from 2014 through 2018.

The Commerce Department also reported Friday that the economy expanded at a modest 2.1% annual rate in the April-June quarter, down from 3.1% in the first three months of the year. Consumers spent at a healthy pace, while businesses cut back on their investment spending for the first time in three years.

Overall, the changes don't significantly alter the broader trajectory of the economy. Growth picked up in 2017 and 2018 after a sluggish 2016, spurred by stronger overseas growth, increased government spending and the Trump administration's tax cuts.

Still, the revisions mean that growth failed to cross the symbolic 3% threshold last year, which it hasn't done since 2005. Most economists point to slower population growth and sluggish increases in worker productivity as the primary reasons for the shortfall.

Trump had been quick to celebrate the government's first report on 2018 growth, released in February, which showed that the economy expanded 3.1%. The figure was subsequently revised lower to 3%.



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