Real Gross Domestic Product (GDP) grew at an annualized rate of 2.1% in the fourth quarter of 2019 according to the first official estimate, broadly in line with consensus expectations (chart below on left). If that figure holds through subsequent estimates – and some adjustments are typical – GDP growth for all of 2019 would come in at just 2.3%, its slowest annual rate since 2016 and equal to the modest average for this economic cycle.

Among the key takeaways:

  • Despite the steady growth implied by recent quarterly GDP figures, below the surface the US economy shows signs of weakening in key sectors.
  • Growth was led by a sharp decline in imports, reflecting weaker consumer spending as well as the bite from rising import tariffs. Consumption and business investment both decelerated again in 4Q, with investment actually declining for the third consecutive quarter.
  • The coronavirus pandemic has emerged as perhaps the biggest downside risk for the global economy, though impacts will be focused on China while hits to the US are likely to be minimal.
  • Expect GDP and job growth to slow further this year, though the risks of recession appear to be receding.
  • In the property sector, market fundamentals should remain strong overall, though transactions and appreciation will likely trend down.

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Category: Economy