US economy grows in Q4, durable goods orders down in Dec

According to data from the US Commerce Department, the country’s GDP was up by 1.9% in Q4 of 2016 after an increase of 3.5% in Q3 and stood below the economists’ forecasts which called for a rise of 2.2%. This slowdown was thought to be driven by the impact of trade due to a decrease in soybean exports.

The reports showed that exports declined while imports were up, which caused GDP to contract. According to the data, exports declined by 4.3% in Q4 after an increase of 10% in Q3 while imports climbed by 8.3% after a rise of 2.2% in Q3.

However, the increase in consumer spending had a positive impact on the country’s GDP in Q4 with an increase of 1.3%, although this was slower than 1.7% in Q3. The Commerce Department also said that private inventory investment, residential and non-residential fixed investment as well as state and local government spending contributed to the growth.

According to data from the US Commerce Department, durable goods orders posted a further decrease by 0.4% on a monthly basis in December after dropping by 4.8% in November and stood quite below the economists’ estimates which were calling for an increase of 2.6%. This surprising drop was mainly driven by the fall in orders for transportation equipment by 2.2%, after it climbed by 14.7% in November. Orders for defense aircraft and parts also dipped by 63.9%, but to some extent it was counterbalanced by the increase in orders for commercial aircraft and parts by 42.4%.

Excluding the drop in orders for transportation equipment, durable goods orders increased by 0.5% after an increase of 1% in November and matched the estimates. Orders for computers, electronic products, machinery, electrical equipment, appliances and components, as well as non-defense goods excluding aircrafts posted increases and contributed to the relatively slower growth in Q4.