4Q sees slowing of economic growth

Associated Press

WASHINGTON

The U.S. economy lost momentum in the final three months of 2016 as a downturn in exports temporarily depressed activity. But there were hopeful signs in housing and business investment that the economy will rebound in the coming months.

The gross domestic product grew at an annual rate of just 1.9 percent in the October-December period, a slowdown from 3.5 percent growth in the third quarter, the Commerce Department reported Friday. GDP, the broadest measure of economic health, was held back by a swing in trade with exports of soybeans plunging in the fourth quarter after having surged in the third quarter.

“If you smooth out the volatility in soybeans, you get growth of around 2.5 percent in the two quarters,” said Nariman Behravesh, chief economist at IHS Markit. “We really didn’t have a slowdown at the end of the year.”

For all of 2016, the economy grew 1.6 percent. It was the worst showing in five years since a similar 1.6 percent gain in 2011. GDP grew 2.6 percent in 2015, and since the recession ended in mid-2009, growth has averaged a weak 2.1 percent.

But analysts believe there were signs in Friday’s report of a rebound in business spending and housing activity, which could lead to stronger growth in 2017 of around 2.5 percent.

President Donald Trump has set a goal of doubling growth to 4 percent in coming years .