GDP’s Like Shrimp Cocktail

Without Cocktail Sauce

Still good, but definitely could be better. U.S. gross domestic product grew at a 2.6% annual rate in the fourth quarter of last year. While that’s better than economists predicted, it’s not quite the 3.4% GDP growth we saw in Q3.

But all in all, not too shabby for a quarter synonymous with uncertainty. Stocks slipped into bear market territory, the government partially shut down, and Pete & Ariana split up.

Let’s keep things in perspective:

  • Comparing Q4 to the rest of 2018 doesn’t feel right—tax cuts and government spending increases juiced Q2 GDP growth above 4%, the fastest rate since 2014.
  • And even with this cooling (which wasn’t as severe as expected), 2018 on the whole was one of the best years for the economy since the Great Recession.

Looking ahead: Many economists expect growth to drop under the 2% threshold in Q1 (in part because of the tail end of that government shutdown).

+ Slept through the lesson on GDP in Econ 101? Here’s a look at why it’s important.

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