Gross domestic product grew just 1.9 percent. As Fred Katayama reports, a plunge in soybean exports was behind the slowdown.
Economic growth in the U.S. slowed in the fourth quarter. GDP grew just 1.9 percent, down sharply from the 3.5 percent rate in the third quarter. The chief culprit: a plunge in soybean exports. Soybeans were in strong demand in the previous quarter because of a poor harvest in Brazil and Argentina. Economist Robert Brusca of FAO-Economics said, "Soybeans giveth. Soybeans taketh away. It's back to reality. The third quarter was clearly something from fantasy land." Exports overall fell as well. That comes as some economists fear that uncertainty over President Trump's trade policy poses a risk to the economy. On the plus side, businesses grew inventories and spent more on equipment. Much of that increased spending came from oil and gas drillers. Mining exploration also picked up. Consumers spent more but at a lower rate than the previous quarter. For the full year, the economy grew only 1.6 percent. That was the slowest pace in five years. Crimping growth: a strong dollar, cheap oil, and an inventory correction. But the outlook for the economy is bright. Consumer and business confidence have soared. Stocks indexes are trading at record highs. And Trump has vowed to boost infrastructure spending and cut taxes and regulations.