Question

find any article regarding current GDP...it can't be dated any sooner than December of 2018! Provide the link...it's required! The article should reflect either a discussion on how fourth quarter GDP reflected the status of the economy or where it seemed to be headed!

Answer 1

The U.S. economy cooled by less than expected last quarter as business investment picked up, suggesting growth could be stronger for longer as the Federal Reserve takes a patient approach to interest rates. The 2.6 percent annualized rate of gains in gross domestic product from October to December compared with the 2.2 percent median estimate of economists surveyed by Bloomberg. It followed a 3.4 percent advance in the prior three months, according to a Commerce Department report Thursday that was delayed a month by the government shutdown.

Consumption, which accounts for the majority of the economy, grew 2.8 percent, slightly below forecasts, while nonresidential business investment accelerated to a 6.2 percent gain on equipment, software and research spending. Government spending slowed, trade was a minor drag and inventories gave GDP a small boost. Treasury yields and the dollar rose following the data.

The report shows how Republican-backed tax cuts may have continued to aid growth and help bring the full-year figure to 3.1 percent, just above President Donald Trump’s 3 percent goal. While the expansion is poised to become the nation’s longest on record at midyear amid a still-healthy consumer, supportive Fed and robust labor market, the pace could cool amid the trade war, slowing global growth and fading impact of fiscal stimulus. The strength in overall private domestic demand “is good enough to keep the momentum in the economy going,” with research and development spending being a “bright spot” in the report.

Growth, while slower than the prior two quarters, remains above both the average pace of the expansion and what the Fed sees as the economy’s long-run potential of 1.9 percent. Still, surveys and gauges such as Treasury yields indicate chances of a recession have increased in recent months while remaining unlikely for 2019. Excluding the volatile trade and inventories components of GDP, final sales to domestic purchasers increased at a 2.6 percent pace following 2.9 percent. Economists monitor this measure for a better sense of underlying demand.

The economy appears to have dodged a bullet at year-end -- but the coast is not clear. Relative to history, the inventory accumulation in the second half of 2018 is large and threatens to overshadow production schedules (and manufacturing-related employment) in the first half of this year. Analysts should carefully scrutinize industrial surveys, such as the manufacturing ISM, for signs of a production lull intended to work off inventory excess.

Housing remained a weak spot last quarter, posting the fourth consecutive drag on GDP growth, with a contraction of 3.5 percent. Home sales tumbled in late 2018 amid elevated mortgage rates and price increases that continued to outpace wages, though there are signs of demand picking up in early 2019 thanks to a drop in borrowing costs. Net exports subtracted 0.22 percentage point from GDP growth during the quarter following a 1.99-point reduction in the prior period. The drag reflected a 2.7 percent rise in imports that outpaced a 1.6 percent increase in exports, with the tariff war buffeting both sets of flows.

https://www.bloomberg.com/news/articles/2019-02-28/u-s-gdp-grows-above-forecast-2-6-as-business-spending-picks-up