4Q GDP Growth Less Than Expected, but Trucking Outlook Still Good
Economic growth in the United States for the fourth quarter of 2017 was less than many expected, with a 2.6% annualized gain in gross domestic product, according the Department of Commerce.
A Bloomberg News survey of economists had projected a 3% rise.
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The 2.6% gain is still good for trucking, according to Rod Suarez, analyst for American Trucking Associations.
“Low inventory investment brought down the overall figure some. However, this implies that there may be more of an increase in inventory investment in the current quarter,” Suarez said in a Jan. 26 report.
He also pointed to data from the Census Bureau on factory orders for durable goods, which rose 2.9% in December.
“Activity really picked up in the second half,” Suarez said. “Even more solid gains should be anticipated in the current year.”
New home sales also appear to be on the upswing. Although sales fell 9.3% in December to a 625,000-unit annual rate, home sales nationally for the fourth quarter were at the highest level in 10 years.
The latest results underscore just how challenging it will be to reach President Donald Trump’s goal of a sustained 3% pace.
The president’s move to cut taxes should help underpin demand going forward, but the pace of household purchases — which account for about 70% of the economy — probably won’t repeat its recent performance anytime soon amid still-modest wage gains and higher debt loads.
The report also shows how a widening trade gap can take a bite out of GDP: While strong domestic demand boosted imports last quarter, exports failed to keep pace even with a global growth pickup and a weaker dollar. Federal Reserve interest-rate increases also could weigh on the expansion, now in its ninth year.
Had GDP met forecasts, it would have been the third straight quarter of 3%-or-better growth, the longest streak since 2005. Higher business confidence since Trump was elected likely has played a role in driving more corporate investment, and lower taxes may extend the resurgence.
