Feb 28, 2017

2016 Preliminary Release: Obama Presides Over Slowest Economic Growth Since Eisenhower (1.4%)

Post by Derek Yale

Today, the U.S. Department of Commerce released its second estimate of gross domestic product (GDP) for the fourth quarter of 2016, announcing that the U.S. economy expanded at an annualized rate of 1.9 percent, down from 3.5 percent during the third quarter, and up from 1.4 percent in the second quarter.

The fourth quarter preliminary reading also confirms the first annual look at economic growth for 2016 reported last month. During 2016, the economy grew at a meager 1.6 percent rate, the slowest reading since 2011. This slow pace shows most families aren’t feeling any meaningful improvements.

Barring higher revisions next month, Former President Barack Obama will have presided over the slowest annual growth of any president since Eisenhower.

Here are the facts:

2016 Average Quarterly Growth: The economy grew at an average quarterly rate of 1.9 percent during 2016, the same growth observed during 2015 and 0.6 percentage points slower than 2014.

Annual Growth Under President Obama: During the eight years under President Obama, annual growth has averaged a sluggish 1.4 percent. This includes the 2016 annual rate of 1.6 percent, 0.8 percentage points slower than 2015. Annual growth under President Obama has been the slowest of any administration since President Eisenhower.

Post-Recession Growth Rate: From 2010 to 2016, the economy averaged a mere 2.1 percent quarterly growth rate. This is significantly lower than the 3.5 percent average rate of growth in the same timespan after the last three recessions and the weakest expansion since 1949.

Pre-Recession Growth Rate: From 1946 to 2007, the U.S. economy expanded at an average quarterly rate of 3.5 percent, significantly higher than the growth rate observed during the current post-recession expansion and 1.6 percentage points higher than the growth rate observed during the fourth quarter of 2016.

Consumer Spending Growth: Consumer spending, which accounts for roughly 70 percent of U.S. economic activity, grew at an annual rate of 3 percent during the during the fourth quarter of 2016. This figure was revised up 0.5 percentage points from last month’s advance release. Overall, consumer spending remains at the same rate of increase observed during the third quarter of 2016, and is 1.3 percentage points slower than the rate seen over the second quarter.