US economic growth slowed sharply in the fourth quarter last year to an annual rate of just 2.2 percent as global weakness, fading government stimulus and rising trade tensions take a toll on the US economy.
Gross domestic product (GDP), the economy’s total output of goods and services, increased at a 2.2 percent in the fourth-quarter of 2018, the US Commerce Department said on Thursday.
The fourth-quarter GDP growth was less than initially thought, which was estimated in February to be 2.6 percent.
Economists believe growth has slowed further in the first quarter of 2019, which runs from January to March.
For all of 2018, the economy grew 2.9 percent as previously reported, the best performance since 2015. Analysts calculate that growth this year will slip to around 2.4 percent.
Concerns over the economy were underscored by other data on Tuesday showing US consumer confidence ebbing in March, with households becoming pessimistic about the labor market.
US homebuilding also fell more than expected in February as construction of single-family homes dropped to near a two-year low.
US President Donald Trump has emphasized that last year’s GDP performance as evidence that the administration’s policies of tax cuts, deregulation, government spending and tougher trade enforcement were working.
The White House has pledged to maintain annual economic growth at 3 percent.
Economists believe the economic slowdown stems from various headwinds, including weaker growth prospects in China and Europe, decreasing US exports due to the Trump administration’s trade tariffs and the waning effect of the 2017 tax cut and government spending.
Trump likes to showcase the economy as one of the biggest achievements of his term, declaring last July that his administration had “accomplished an economic turnaround of historic proportions.”
On the campaign trail, Trump boasted he could boost annual GDP growth to 4 percent, a goal analysts always said was unrealistic given low productivity, among other factors.