Fourth-Quarter U.S. GDP Growth Cut to 2.4 Percent
The U.S. government slashed its estimate for fourth-quarter growth as consumer spending and exports fell below initially estimates, suggesting a loss of economic momentum heading into 2014. Gross domestic product (GDP) expanded at a 2.4 percent annual rate, the Commerce Department reported on Friday. That marked a sharp drop from the 3.2 percent pace reported last month and the 4.1 percent logged in the third quarter. Economists polled by Reuters had expected growth would be cut to a 2.5 percent pace. It is not unusual for the government to make revisions to GDP numbers, as it does not have complete data when it makes its initial estimates. In fact, the latest figures will be subject to revisions next month as more information is received. The revision left GDP just above the economy’s potential growth trend, which analysts put somewhere between 2 percent and 2.3 percent. Even with the revision, the second-half growth pace hit 3.3 percent and jumped from 1.8 percent in the first six months of 2013. Consumer spending accounted for a large chunk of the revision, after retail sales in November and December came in weaker than assumed.