US GDP slows in fourth quarter, consumption revised higher

US economic activity slowed in the final stretch of 2016 as export growth cooled and a key measure of price pressures fell back.

American gross domestic product expanded at an annualised pace of 1.9% in the fourth quarter, down from growth of 3.5% in the third quarter, according to revised data from the Department of Commerce.

That was exactly as expected by economists and in-line with a preliminary estimate.

A downturn in exports was the main culprit behind the slowdown from one quarter to the next, the government said.

In nominal terms, GDP grew by 3.9% or $180.2bn to 18,855.5bn, which was less than the 5.0% rise observed during the previous three months.

Preliminary estimates for household consumption were revised higher, while government spending and non-residential fixed investment were marked down.

Core PCE lower

The price index for gross domestic purchases advanced at a 1.9% clip in quarter four, versus 1.5% in quarter three.

That mimicked the acceleration seen over the same time frame in the price deflator for personal consumption expenditures.

However, at the 'core' level the PCE price deflator was ahead by 1.2%, down from the 1.7% seen over the three months to September.

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