WASHINGTON — The U.S. economy lost momentum in the final three months of 2016, closing out a year in which growth turned in the weakest performance in five years, with the yearly rate down to 1.6 percent.
That compares unfavorably to 2.6 percent in 2015 and 2.4 percent in 2014.
The Commerce Department says 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. GDP, the broadest measure of economic health, was held back by a jump in the trade deficit.
This was slightly down from economists’ consensus of 2.2 percent. But it is in keeping with the typical GDP increase of around 2 percent in recent years.
For all of 2016, the economy grew 1.6 percent. It was the worst showing since 2011 and down from 2.6 percent growth in 2015.
President Donald Trump has set a goal of doubling growth through an ambitious stimulus program featuring tax cuts, deregulation and higher infrastructure spending.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, noted that the change in foreign trade key subtracted a substantial 1.7 percentage points from GDP growth. He attributed that to a reversal of most of the third quarter’s increase in soybean exports, and said he expected the situation to improve in this year’s first quarter.
Veronica Willis, investment strategy analyst for Wells Fargo Investment Institute, projected that GDP would come in at 2.1 percent this year, “driven by strong consumer spending, improving business investment, and inventory expansion.”