US Q4 2018 GDP rises 2.6% after government shutdown

The US 2018 GDP exceeded analysts' expectations.

The US fourth quarter(Q4) 2018 gross domestic product (GDP) rose by 2.6%, according to the US Bureau of Economic Analysis. The figures about the US economy surpassed financial analysts’ expectations for 2018, but the quarter results were worse-than-expected.

US Q4 GDP key figures

Consumer spending +2.8%
Exports +1.6%
Imports +2.7%
Retail sales -1.2%
New construction -3.5%

What was positive about the US Q4 GDP numbers?

The US Q4 GDP figures show a strong growth in consumer confidence. Personal consumption increased by 2.8% as Americans spent more money on services like healthcare and new purchases like cars and trucks. Employment figures also surged, with 200,000 payroll increases a month and wages going higher as well. Jim Moran, chief investment officer at Plante Moran Financial Advisors, said that the data shows that the US economy is still strong.

‘For all the hand-wringing and angst, you’d have to go back to 2005 to find a year in which the economy grew at a faster pace,’ said Moran.

What was negative about the US Q4 GDP numbers?

While the US Q4 GDP figures show some strength in the economy, there were still disappointing numbers in aspects of the economy. The decline in the housing market meant a 3.5% dip in new construction. A downturn in retail sales also negatively impacted the GDP.

Government gridlock also contributed to a decline in the US Q4 GDP. The month-long government shutdown may have caused a 0.1% dip in the GDP. There was also a surge in the trade deficit as imports grew faster than exports. Charlie Ripley, senior investment strategist at Allianz Investment Management, noted that the employment numbers and retail figures tell two different stories about the US economy.

‘A healthy labor market has typically been a strong signal for solid consumption and economic growth in the US but weaker than expected retail sales data from December has cast doubts on how resilient the US economy is from the weight of slowing global growth,’ said Ripley.

The US Q4 GDP numbers show that the global economic slowdown hasn’t reached the US yet. However, the figures also show that the US has to overcome trade deficits and a retail sales slump to grow in Q1.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.