America’s economy cooled last quarter, but not as much as feared, as consumer spending slowed

• Latest: US GDP shows economy slowing
• American economy expanded by 2.9% - Trump wanted 3%
• US GDP rose by 2.6% in Q4, down from 3.4% (annualised).

Earlier:

• EU migration to UK hits 10-year low
• Introduction: Chinese factory exports tumble
  
• Trump-Kim summit failure hits stocks
  

2.56pm GMT

Kay Daniel Neufeld, managing economist at the CEBR thinktank, is relieved that America avoided an abrupt slowdown in the last quarter.

However, he also expects growth will be slower in 2019 - averaging 2.3% (again, below that 3% target).

Contrary to most other large economies, the US has bucked the trend and recorded faster GDP growth in 2018 than in the previous year. The weak retail sales recorded for December alarmed analysts fearing an abrupt slowdown to the US expansion in the final quarter of last year, but today’s stronger than expected GDP data suggest the December figures might have been a blip.

Nevertheless, there is little room for complacency. With the world economy slowing and the US –China trade conflict merely on hold, there are plenty of pitfalls to avoid if the US wants to achieve another stellar performance in 2019.”

2.39pm GMT

The US has “proved the doubters wrong” by growing faster than expected in the last quarter of 2018, says James Knightley, ING’s chief international economist.

Here’s his take:

The details show a partial slowdown in consumer spending growth (2.8% versus 3.5% in 3Q18), but it continues to make a strong contribution. In fact, given the equity market turmoil at the time and the poor official retail sales figure for December, this isn’t a bad outcome at all.

Non-residential investment spending actually posted a decent performance, recording growth of 6.2% despite the concerns about what escalating trade tensions could mean in terms of supply chains and corporate profitability.