U.S. economy sees slower growth in Q4

The U.S. economy expanded at a lower-than-expected annual rate of 1.9 percent in the fourth quarter of 2016, slower than the 3.5 percent increase from the previous three months, according to an advance estimate released by the Commerce Department on Friday.

The Commerce Department attributed the slower growth to the fall in exports, an acceleration in imports and a slowdown in consumer spending.

Consumer spending, accounting for about 70 percent of the U.S. economy, increased 2.5 percent in the fourth quarter, dropping 0.5 percent from the previous quarter.

Due to the U.S. dollar appreciation in 2016, exports dropped 4.3 percent in the last quarter, compared to a 10-percent surge in the third quarter, while imports surged 8.3 percent in the fourth quarter, against the 2.2 percent growth in the previous one.

Data also showed that net exports subtracted 1.7 percentage points from GDP growth in the fourth quarter.

Due to soft business investment and slower consumer spending, real GDP increased 1.6 percent in 2016, a sharp drop from the 2.6 percent growth in 2015.

Analysts expected the U.S. economy to expand at a faster pace this year since the new U.S. administration could roll out a fiscal stimulus.

The International Monetary Fund (IMF), while predicting that the U.S. economy would grow 2.3 percent in 2017 on a fiscal stimulus, also warned that the it might widen the U.S. fiscal deficit, further appreciate the dollar, and in turn hurt the exports. Endi