From The Washington Post:
The U.S. economy expanded 1.9 percent between October and December, government data showed Friday morning, capping off a long period of tepid expansion under the Obama administration.
For the full-year 2016, the economy grew 1.6 percent, the lowest reading on record since 2011 and down from an increase of 2.6 percent the prior year.
The reading fell short of expectations of economists surveyed by Bloomberg News, who had forecast 2.2 percent annualized growth in the fourth quarter, roughly in line with average growth seen since the beginning of 2010.
Economists blamed slow growth last year primarily on lackluster business investment, as historically low oil prices during most of 2016 brought expansion in the U.S. energy sector to a halt.
However, data showed that business investment turned up in the fourth quarter as global oil prices began to rise – a sign that the U.S. economy could be turning a corner into 2017.
“The GDP data show that the economy’s growth peaked about the middle of 2014, just when commodity prices peaked, and the big downturn in commodity prices led to a slowdown in activity that affected the next year and a half,” said Kevin Logan, chief U.S. economist at HSBC. “Now we’re on the other side of that.”
Businesses appeared to be stocking up on inventories and investing more at the end of the year. That’s one critical area that has lagged behind in the recent economic expansion, said Kathy Bostjancic, the director of U.S. macro investor services at Oxford Economics.
Businesses have been reluctant to spend, given the lack of clarity about what the new presidential administration might do in terms of economic policy, trade, government spending, immigration, corporate reforms and regulation, said Bostjancic. “That is a critical issue, the lack of certainty, so businesses have really been holding back.”
The strength of the dollar also weighed on the economy, Logan said, making imports more attractive and expanding the trade deficit. Consumer spending, which accounts for more than two-thirds of the U.S. economy, was a relative bright spot, especially on automobiles, appliances and electronics.
The dollar weakened and Treasury yields fell Friday morning. Stock markets, which have hovered near all-time highs in recent weeks, were little …