US growth unchanged at 2.1% in fourth quarter
Gross domestic product is a measure of how much the US produces in goods and services
Roubini Macro Associates CEO Nouriel Roubini discusses the impact coronavirus can be expected to have on U.S. economic growth.
The U.S. economy maintained a steady pace of growth in the fourth quarter of last year, the government confirmed Thursday morning.
Gross domestic product, a measure of how much the U.S. produces in goods and services, increased at a 2.1 percent annualized rate, the Commerce Department said in its second reading of the three-month period from October through December.
That was unrevised from the initial estimate of 2.1 percent last month.
For the full year, the economy grew 2.3 percent, below the 2.9 increase from 2018 and the 2.4 percent gain in 2017, amid fading fiscal stimulus from President Trump's 2017 Tax Cuts and Jobs Act and an 18-month trade war between the U.S. and China that rattled global financial markets.
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Consumer spending, which accounts for more than two-thirds of the country’s now $21.7 trillion economy, was revised down to a 1.7 percent increase from 1.8 percent. Nonresidential fixed investment was revised lower to a 2.3 percent drop.
The report comes amid a stock-selloff brought on by fears of the deadly coronavirus, which has killed close to 3,000 people and infected more than 80,000, mostly in China.
While most data in the U.S. has yet to reflect the impact of the virus, which has forced China, the world's second-largest economy to all but halt production of consumer goods, some indicators suggest the economy may take a hit.
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Although it's less trade-reliant than some other countries, like Japan or Germany, which could help shield it from slowing external demand, U.S. companies' bottom lines could be hurt by the virus, according to the Cailin Birch, global economist at the Economist Intelligence Unit.
Already, Apple said it will likely fall short of its revenue guidance in the second quarter and that worldwide iPhone supply will be “temporarily constrained," while Amazon is working to avoid potential disruptions in its supply chain.
"If the virus is not contained within China by end-March, as The EIU currently expects, this could weigh on corporate earnings to an extent that job creation and unemployment in the US would be negatively affected," Birch said. "This would weigh on consumer spending--the only source of buoyant growth in the US economy.”