Connect with us


U.S. Economy Growth Ran Slower Than Expected in Q4



The us dollar against the background of a declining chart. US economy | Recession Odds Increasing (Shocking Charts Revealed)

The U.S. economy grew less than expected in the fourth quarter of 2017 but inflation increased, per the updated official data released on Thursday.

The second estimate of the gross domestic product released by the Commerce Department indicates that the economy expanded at an annual inflation-adjusted rate of 2.7 percent from October through December. According to the prior estimate, the economy grew at a rate of 2.9 percent.

The significant downshift in the estimate of consumer expenditure was what caused the downward revision. The revised forecast shows that consumer spending is only expected to increase by 1.4 percent annually, down from the previous estimate of 2.1 percent.

The drop in spending may be the result of American households changing their end-of-year spending patterns. Many people now purchase holiday gifts as early as September, which is in the third quarter of the year, since holiday shopping has shifted earlier in the year.

However it appears that consumer spending is already picking up again. The labor market indicators have been exceptionally strong, with jobless claims running at historically low levels, job openings expanding to 11 million, unemployment falling to the lowest level in decades, and payrolls expanding by a scorching-hot half-million in January. Retail sales in January exceeded expectations. Following a respite in November and December, inflation picked up speed in January.

Investors and analysts have been compelled to reevaluate their forecasts for inflation and monetary policy in light of the evidence of increased economic vigor. The Fed is now likely to increase its benchmark rate by three-quarters of a point, up from the half-point anticipated at the beginning of the year, according to market indicators. Similar to that, forecasts for a recession have been moved from this year’s first half to the second.

Sign Up For The Capitalist Newsletter

The Commerce Department also increased its estimate of corporate investment from its prior estimate of 1.4 percent to 3.7 percent pace.

The personal consumption expenditure price index estimate, which the Federal Reserve uses to anticipate inflation and set its two percent objective, was raised from 3.2 percent to 3.7 percent. The original estimate of 3.9 percent was revised up to 4.3 percent for core prices, which do not include food and energy.

Up Next:

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Continue Reading
Sign Up For The Capitalist Newsletter

Copyright © 2023 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.

Is THE newsletter for…


Stay up-to-date with the latest kick-ass interviews, podcasts, and more as we cover a wide range of topics, in the world of finance and technology. Don't miss out on our exclusive content featuring expert opinions and market insights delivered to your inbox 100% FREE!


Get ready to stay up-to-date with the latest business and market news from around the world!

The Capitalist is here to provide you with insightful data, analysis, and even videos to keep you informed.