Mar 28, 2019
2018 Q4: Economy Grew At A 2.2 Percent Rate (Final Estimate)
Post by Freedom Partners
This morning, the U.S. Department of Commerce released its final estimate of gross domestic product (GDP) for the fourth quarter of 2018, and announced that the U.S. economy expanded at an annualized rate of 2.2 percent, revised down from the 2.6 percent estimate last month, and down 1.2 percentage points from the third quarter. However, today’s report provided another look at annual economic growth during 2018, showing the economy grew at a 2.9 percent rate. This was up 0.7 percentage points from 2017, and the fastest annual rate seen since 2015 when the economy also grew at a 2.9 percent pace. The last time the economy grew at a faster annual rate was in 2005 when real GDP increased by 3.5 percent.
Additionally, today’s release provides another look at how the economy has changed during the past two years. Overall, annualized quarterly growth averaged 2.7 percent, and real after-tax income per person increased by $1,641. Further, the economy recorded its 19th quarter of consecutive growth.
However, tariffs imposed over the past year threaten to undermine future economic growth, already having burdened American businesses, workers, and consumers with higher costs. A recent paper from economists at Federal Reserve Bank of New York, Princeton University, and Columbia University estimated that tariffs imposed by the administration last year cost the economy $1.4 billion per month. Tariffs benefit only a few politically connected industries at the expense of most consumers and businesses. Lowering trade barriers will improve lives by growing the economy, increasing pay checks, and creating new and better jobs.
Below is an examination of today’s report, detailing what the findings indicate about the U.S. economy during the past 2 years.
Note: The Commerce Department updated benchmarks used to compute gross domestic product (GDP) and its components from chained 2009 dollars to chained 2012 dollars, which are reflected in this report.