WASHINGTON — The U.S. economy's growth slowed sharply in the final three months of 2015 to a 0.7 percent annual rate. Consumers slowed spending, businesses cut back on investment and global problems trimmed exports.
The slowdown could renew doubts about the durability of the 6½-year-old economic expansion, though most economists expect growth to rebound in the current January-March quarter.
The government's estimate Friday of the economy's expansion in the October-December period was less than half the modest 2 percent annual growth rate in gross domestic product in the previous quarter. It was the weakest showing since a severe winter slowed growth to a 0.6 percent annual rate in last year's first quarter.
Paul Ashworth, chief U.S. economist at Capital Economics, called the disappointing fourth quarter performance a "temporary blip" and not likely "the start of a more serious downturn."
Ashworth said he thinks GDP growth will rebound to an annual rate between 2.5 percent and 3 percent in the first half of this year as consumer spending picks up in response to further solid gains in job growth. For 2016 as a whole, Ashworth is forecasting economic growth of 2.5 percent.
Much of the weakness last quarter reflected a slowdown in consumer spending, which grew at an annual rate of 2.2 percent, compared with a 3 percent rate in the previous quarter. Spending on both durable goods, such as cars, and nondurable goods, such as clothing, slowed.
Consumer spending accounts for about two-thirds of economic activity, and most analysts are counting on continued strong employment growth to fuel a rebound. Some, however, worry that China's economic troubles and sinking oil and stock prices could continue to dampen the U.S. expansion.
Friday's estimate of fourth-quarter growth was the first of three the government will issue.
See Saturday's Arkansas Democrat-Gazette for full details.