US GDP Growth Rate QoQ Adv (Q4) Q/Q 1.4% vs. Exp. 3.0% (Prev. 4.4%, Low. 1.7%, High. 4.4%)

The US GDP growth rate for Q4 came in at 1.4%, significantly below the expected 3.0%, indicating a weaker economic performance and a potential slowdown from the previous quarter's 4.4%.

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US GDP Growth Rate QoQ Adv (Q4) Q/Q 1.4% vs. Exp. 3.0% (Prev. 4.4%, Low. 1.7%, High. 4.4%)

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  • The contributors to the increase in real GDP in the fourth quarter were increases in consumer spending and investment. These movements were partly offset by decreases in government spending and exports. Imports, which are a subtraction in the calculation of GDP, decreased.

BEA on the shutdown impact: 

  • "The full effects of the partial federal government shutdown on the fourth-quarter estimates cannot be quantified... However, BEA did estimate the effects of a reduction in the labor services supplied by federal employees. BEA estimates that this reduction in services provided by the federal government subtracted about 1.0 percentage point from real GDP growth in the fourth quarter."
Context

The lower growth was driven by plummeting government spending and exports, which partly offset gains from consumer spending and investment. This miss could imply a more cautious monetary policy stance as it suggests downside risks to economic strength and inflation expectations.

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