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U.S. GDP slows in fourth quarter and all of 2016

Staff Writer |
The U.S. economy slowed noticeably at the tail-end of 2016, weighed down by a negative contribution from international trade and lower federal government spending.

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Gross domestic product expanded at a quarterly annualized pace of 1.9% during the fourth quarter, according to the Department of Commerce, which was less than 3.5% seen over the previous three months and below forecasts for growth of 2.1%.

On the prices front, the price index for gross domestic purchases printed at 2.0% (consensus: 2.1%), versus 1.5% in the third quarter, while the price deflator for personal consumption expenditures jumped from 1.5% to 2.2%.

At the core level, excluding prices for food and energy that is, PCE on the other hand revealed a decelerating trend in the rate of price increases, from 1.7% in the third quarter to 1.3% in the fourth.

The personal savings rate ticked lower, falling from 5.8% to 5.6%. For all of 2016 GDP grew by 1.6%, down from the 2.6% observed in 2015.

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