2019.02.2809:27:00UTC+00U.S. Economic Growth Slows Less Than Expected To 2.6% In Q4

Economic growth in the U.S. slowed in the fourth quarter of 2018, according to a report released by the Commerce Department on Thursday, although the pace of growth still exceeded analyst estimates.

The Commerce Department said real gross domestic product climbed by 2.6 percent in the fourth quarter compared to the 3.4 percent jump in the third quarter. Economists had expected GDP to increase by 2.3 percent.

The bigger than expected increase in GDP came as consumer spending growth slowed but continued to make a strong contribution to the economy.

Consumer spending jumped by 2.8 percent in the fourth quarter after surging up by 3.5 percent in the third quarter.

The report also showed positive contributions from non-residential fixed investment, exports, private inventory investment, and federal government spending.

However, negative contributions from residential fixed investment and state and local government spending limited the upside.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the details of the report show "better-than-forecast contributions from domestic consumption and business investment."

"Nevertheless, as a result of the already-reported weakness in retail sales and exports in the final month of last year, we expect first-quarter GDP growth to be a more disappointing 1.5% annualized," he added.

The Commerce Department said its reading on core consumer prices, which exclude food and energy prices, showed price growth accelerated to 1.7 percent in the fourth quarter from 1.6 percent in the third quarter.