WASHINGTON – The U.S. gross domestic product, a broad measure of the economy, increased by 2.3 percent in 2017, federal economists reported Friday.
GDP growth slowed in the year’s fourth quarter to an annualized rate of 2.6 percent, breaking a two-quarter streak of growth of more than 3 percent.
The economy grew far faster in 2017 than during the year before, but the slowed fourth quarter growth underscores the challenge President Trump’s administration will have in delivering the growth rates he has promised. Officials had focused on 3 percent GDP growth as proof his economic policies were working.
Trump and Republicans are counting on massive economic growth to prevent the more than $1.5 trillion in tax cuts Trump signed into law in December from adding to the deficit, though that would require growth far beyond the 3 percent target. The tax bill will take effect in 2018’s first quarter, cutting tax rates for corporations and individuals.
The federal Bureau of Economic Analysis provides the GDP figures, which are subject to revision as the agency collects more data.
Overall, the domestic economy remains strong. Unemployment is at a low 4.1 percent, and job growth remains steady, if unspectacular. In 2017, the economy added 2.1 million jobs, compared with 2.2 million in 2016, federal economists reported earlier this month.
Economic growth, however, is affected by far more than presidential policy, as businesses move in cycles of investment and consolidation while consumer confidence ebbs and flows. U.S. growth is also affected heavily by economic global conditions, as the state of foreign countries changes demand for U.S. exports and foreign firms’ interest in investing in the United States.
The U.S. economy grew 1.5 percent in 2016, 2.9 percent in 2015 and 2.6 percent in 2014. It has grown every year since 2009, when it shrank 2.8 percent.