US growth slows in the fourth quarter

US gross domestic product growth slowed sharply in the fourth quarter to an annualised rate of 0.7% from 2% in the third, preliminary data from the Commerce Department showed.

This was weaker than the 0.8% expected by economists.

The Commerce Department said it reflected a deceleration in personal consumption expenditure and downturns in non-residential investment, exports, and state and local government spending that were partly offset by a smaller decrease in private inventory investment, a slowdown in imports and an up-tick in federal government spending.

Dennis de Jong, managing director at UFX.com, said: “The outlook was pretty bright for the Federal Reserve when it raised interest rates for the first time in nearly a decade in December. It’s most definitely gloomier now.

“GDP often goes through peaks and troughs, so it would be alarmist to suggest today’s data is the start of something more serious. That said, it pushes another rate hike in March into the very unlikely bracket.”