US growth rate lowest in five years
By
Nick Beams
30 January 2017
The US economy expanded at its slowest rate for five years in 2016 according to preliminary data issued on Friday. Gross domestic product (GDP) rose by only 1.6 percent in 2016, down from 2.6 percent in 2015, the Bureau of Economic Analysis reported.
The figures may be revised later this month, but they mark a significant decline from the annual rate of growth of 3.5 percent recorded in the third quarter. The economy expanded at an annual rate of only 1.9 percent in the last three months of the year, below economists’ forecasts of 2.2 percent.
The Wall Street Journal noted that the US economy ended the year “on a familiar trajectory of roughly 2 percent economic growth, the lacklustre trend that has prevailed through most of the current expansion.” Since the official end of the recession in mid-2009, the US economy has grown by an average of 2.1 percent per year, the lowest for any recovery in the post-war period.
The slowdown in the US rate of growth is part of an international trend. As Martin Wolf, the economics commentator for the Financial Times, has pointed out, if growth rates for the major economies had returned to the levels they reached before the financial crisis of 2008–2009, major economies would be one sixth larger than at present.
The slowdown in growth, both in the US and internationally is accompanied by another significant tendency. The growth in global trade, which was running as much as twice the rate of increase of global GDP before 2008, is expected to fall below the rate of GDP growth in 2016.
One of the immediate causes for the sharp turnaround in the US GDP in the fourth quarter was a steep decline in exports, which contributed to a fall of 1.7 percent in the GDP numbers….