Fourth Quarter GDP Grew 2.6 percent, Slowed by the Government Shutdown

Real GDP grew at a seasonally adjusted annual rate of 2.6 percent during the Fourth quarter of 2018, according to the Bureau of Economic Analysis’s “initial” estimate, down from 3.4 percent in the third quarter. The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, private inventory investment, and federal government spending. Those were partly offset by negative contributions from residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

Consumption accounted for 1.92 percent of the gain, down from 2.37 percent during the third quarter. Fixed investments added a total of 0.69 percent to GDP. After inventories added 2.3 percent to GDP last quarter, they added 0.13 percent in the fourth quarter.

Government spending increased marginally the quarter, adding 0.07 percent to growth. Federal and state and local government subtracted 0.03 percent from the GDP increase.

Read the BEA release.