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US economic growth slows in Q4 2016 from weak exports

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By Euronews
US economic growth slows in Q4 2016 from weak exports

US economic growth slowed more than expected in the final three months of last year.

The first official estimate from the Commerce Department showed gross domestic product increased by 1.9 percent from the same period in 2015.

That was a sharp deceleration from the 3.5 percent growth pace recorded between July and September.

Soybean slump

One factor was a big fall in exports linked to a plunge in shipments of soybeans, which had fired up GDP growth in the third quarter after a poor soy harvest in Argentina and Brazil.

Steady consumer spending and rising business investment suggests the US economy will continue to expand.

For all of 2016 GDP grew only 1.6 percent – the weakest pace since 2011. Growth in the first half of the year was curbed by cheap oil and a strong dollar, which undercut company profits and weighed on business investment.

The outlook for the US economy is bright for 2017.

The labour market is at or near full employment which is starting to lift wages and supporting consumer spending.

Trump boost

Growth this year could also get a boost from President Donald Trump’s pledge to increase infrastructure spending, cut taxes and reduce regulations.

Although Trump has offered little detail on his economic policy, his promises have been embraced by consumers, businesses and investors. Consumer and business confidence have soared, while the US stock market has rallied to record highs.

But uncertainty over the Trump administration’s trade policy poses a risk to the economy.