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3/01/2018 3:02 pm  #1

Year-End Growth Revised Down, First Quarter Looks Set to Slow

Year-End Growth Revised Down, First Quarter Looks Set to Slow From There

GDP expanded 2.5% in the fourth quarter, and the early part of 2018 is forecast to be even lower

WASHINGTON—U.S. economic growth was slightly weaker than initially thought during the fourth quarter and may be cooling a bit in the first quarter as well.

Gross domestic product, a broad measure of the goods and services produced across the U.S., rose at a 2.5% seasonally and inflation-adjusted annual rate in the fourth quarter, the Commerce Department said Wednesday. The agency in January estimated last quarter’s growth rate at 2.6%.

The government’s estimate of output was reduced because companies drew more from their inventories than previously estimated, meaning they had less to produce. Business investment also was slightly weaker than initially reported, growing at a 6.6% rate last quarter versus an originally reported 6.8%.

The Federal Reserve Bank of Atlanta, for example, has shifted its forecast for first quarter growth from 5.4% growth down to 2.6% since Feb. 1. Forecasting firm Macroeconomic Advisers projects a first quarter growth rate of 1.8% as of Wednesday. That would be slower than growth rates exceeding 3% in the middle of last year.

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