- U.S. economic growth stagnated in the fourth quarter
- Dow Jones Industrial Average down 69 points
- Commerce Department data reveals slowdown
The Dow Jones Industrial Average reacted to news of lagging U.S. economic growth in the fourth quarter by falling lower.
Nevertheless, the figures published by the Commerce Department on Thursday showed that growth had not quite slowed down as much as experts had predicted.
Economists expected a 2.5% growth rate on average for gross domestic product in the fourth quarter after the economy had expanded by 3.4% in the third quarter. In fact, the slowdown was to a rate of 2.6% annual growth.
Some of the elements that factored into the figures include a fading stimulus from Trump’s corporate tax cuts, a drop-off in consumer spending, the ongoing trade war with China and the longest-ever government shutdown.
Private inventory investment and federal government spending also played a role, according to the Commerce Department.
In the wake of the release of the figures, the Dow Jones Industrial Average went down by 69 points to 25,916 (a dip of 0.27%), while the S&P 500 dropped 0.28% and the Nasdaq fell 0.29%.
Earlier in the session, National Economic Council Director Larry Kudlow pointed to a positive atmosphere in the trade talks between the U.S. and China as a reason for optimism. On Thursday, he said that discussions were making great progress.
“Last week was fantastic,” Kudlow said. “We’re making great headway on non-tariff barriers and tariffs regarding various commodities such as soybeans and energy and beef. We have mechanisms with regard to enforcement, which is – I think – unparalleled.”