Less Growth

By Isaac Cohen*

After achieving vigorous growth last year, stimulated by the tax reform, the US economy entered into a sliding trend and closed growing modestly during the last quarter of 2018. Last week, the Commerce Department revealed that, from last October to December, US economic growth reached an annual rate of 2.6 percent, adjusted for inflation and for seasonal factors. This was less than 4.2 percent in the second quarter and 3.4 percent in the third. On a yearly basis, economic growth of 2.9 percent in 2018 almost reached the rate of 3 percent expected by the Trump administration and was better than 2.2 percent in 2017.

Some of the factors which contributed to the end of year cooling were external, such as the slowdown in China, Europe and Japan. But others were homegrown, such as the trade confrontation with China, or the government shutdown and increased interest rates, which spooked the markets by year’s end.

The outlook for this year has improved, given the central bank promise of patience, to “watch and wait” on interest rates, less concern about another government shutdown, at least until September, and news about an agreement on trade with China. The markets have reacted positively, posting the best start in thirty years, while 304,000 new jobs were created in January. Even so, growth projections expect the slowdown will continue. The Federal Reserve Bank of Atlanta estimates 0.3 percent growth for this year´s first quarter.

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: [email protected]

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