The U.S. economy slowed modestly in the last quarter of 2018 but still grew at the fastest rate in three years, the Commerce Department reported Thursday.
GDP, or gross domestic product, is the broadest measure of all the goods and services produced within the economy. It expanded at a 2.6 percent annualized rate in the fourth quarter, a slowdown from the 3.4 percent growth in the third quarter.
The main reason grows fell in the fourth quarter: a decline in consumer spending. The government shutdown in the last 10 days of the year also reduced growth by 0.1 percent (The latest GDP figure could change as the U.S. Commerce Department refines its estimate over the next few months.)
For all of 2018, GDP was 2.9 percent, matching 2015 for the high point in the current economic expansion, which started in late 2009. But it falls just short of President Donald Trump's promise to grow the economy at 3 percent a year over the next decade.
Looking ahead, economists predict a sharply slower first quarter, thanks to the government shutdown, rising gasoline prices and unresolved trade issues, with growth continuing at at around 2 percent in the near future. The Federal Reserve forecasts growth of 2.3 percent this year.
"The bigger picture for this year is that growth is reverting to the post-crash trend, 2-to-2.5 percent, demonstrating that the personal tax cuts offered nothing more than a sugar high, and that the business tax cuts did nothing to lift trend growth," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note.