THE NEW ANEMIA: U.S. GDP Advanced 1.9% in Final Quarter of 2016.
Economists surveyed by The Wall Street Journal had expected an upward revision to a 2.1% growth rate.
The latest figures are a marked deceleration from the third quarter’s 3.5% pace, which had been the strongest reading in two years. They are, however, broadly in line with an economy that has, through ups and downs, settled at a roughly 2% growth pace since the recession ended.
The current expansion has endured for more than seven years, longer than the historical average, but its rate of growth has been the weakest since at least 1949.
Despite the low trajectory, GDP data from the end of 2016 and more recent indicators suggest the economy is on fairly solid footing as February comes to a close.
Tuesday’s report showed consumer spending, the main driver of the economy, was stronger than thought. Personal consumption expenditures were revised to a growth rate of 3%, compared with an earlier estimate of 2.5%.
3% spending growth isn’t sustainable for very long when the economy is growing a third slower than that.