Inventories and Rising Trade Deficit Hold Down Fourth-Quarter GDP

Washington, DC—(ENEWSPF)—January 26, 2018

By: Dean Baker

The savings rate is at the lowest level since the peak of the housing bubble.

The Commerce Department reported that GDP grew at a 2.6 percent annual rate in the fourth-quarter, somewhat less than most economists had predicted. The weaker-than-expected growth was the result primarily of weak inventory accumulation and a sharp rise in the trade deficit. However, even with the weaker-than-expected fourth-quarter figure, the 2.5…