The economic growth in the United States witnessed a slowdown in the fourth quarter of 2014 as the economy expanded sluggishly than previously thought after being restrained by a widening trade gap and smaller gain in stockpiles.
The US Commerce Department on Friday said that the economy, which is measured by the gross domestic product (GDP), grew at 2.2 percent annual rate in the fourth quarter. The figures were weaker than the first estimated 2.6 percent in January. The lower growth rate has marked a major slowdown from the third quarter, which has witnessed the strongest growth in 11 years.
According to the Commerce Department report, the country’s GDP increased at an annual rate of 2.2 percent. The figure was down from the initially estimated 2.6 percent.
83 economists had made the median forecast of a two percent growth pace of the US economy.
Last quarter, the consumer spending jumped by the most in four years, highlighting the underlying strength of the economic expansion of the country.
A recovering labor market and cheaper costs of fuel will also probably keep underpinning the households in 2015, which will assist the United States in overcoming a slowdown in its exports sector as the US dollar surges and the foreign economies continue to struggle.
Scott Brown, chief economist at Florida-based Raymond James & Associates, said, “The economy is still chugging along pretty nicely. We’re seeing better job growth, the decline in gas prices is really going to be beneficial for consumers and small businesses, and that should help the pace of growth to pick up.”
According to the analysts, trade also played a big factor in weighing more heavily on growth than previously thought as it contributed to the subtraction of 1.2 percentage points. This occurred due to the stronger growth of imports than initially thought.