President Trump missed his ambitious growth target for the American economy by a wide margin last year, a report has confirmed.
Gross domestic product rose by 2.1 per cent annualised in the fourth quarter, the commerce department said in its first of three estimates. This meant the economy grew 2.3 per cent in 2019, behind the president’s 3 per cent goal and at its slowest pace since 2016.
Mr Trump has based the success of his presidency on strong growth. The White House said in its 2017 budget that GDP would need to rise by 3 per cent a year to ensure that its $1.5 trillion of tax cuts paid for themselves. Growth in 2018 was 2.9 per cent and in 2017 it was 2.4 per cent.
Pablo Shah, of the CEBR think tank, said the headline growth rate was “far from disastrous when viewed in the context of the current performance of other major economies”.
Gregory Daco, of Oxford Economics, a consultancy, said: “This report will comfort the Fed that the economy is in ‘a good place’ and monetary policy is ‘appropriate’ for now. But disappointing growth in early 2020, along with sub-2 per cent inflation and tightening financial conditions will lead a doveish Fed to provide additional policy accommodation in mid-2020.”