US GDP data was released for the last quarter of 2018, showing a 2.6% annualised growth rate. This pales in comparison to 3.4% expansion for the July to September quarter and shows that the US economy is slowing, as predicted by the markets.
Despite this, the fall did beat expectations, which were pitched at 2.4%. Retail figures from December 2018 caused analysts to worry, however the stronger than expected growth suggests that this didn’t have the quite impact that was expected. While the growth rate has slowed, the US is still doing better than the UK and Germany did in the last quarter.
As a whole, GDP growth for 2018 was 2.9%, meaning that Trump has just fallen short of his 3% growth target, which was pledged during his 2016 election campaign.
Yesterday, White House economic adviser Larry Kudlow said that China would have to report any interventions in the FX market under a deal with the US. It is thought unlikely that China will sign up to this. With the US-China trade war still unresolved and the world economy slowing, there are many pitfalls to avoid if the US wants to achieve economic growth in 2019.
Meanwhile, the Trump-Kim denuclearisation saga continues, with North Korea saying that they only requested partial sanctions relief. The US, however, still insist that a full lift of sanctions was asked for. It will be interesting to see how this plays out, and if a deal between the two nations can ever be met.
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