By Chico Harlan January 29 at 7:49 AM
The U.S. economy grew at a rate of 0.7 percent in the last quarter of 2015 amid a global slowdown, according to government data released Friday morning.
Economists surveyed by Bloomberg expected that the economy — between October and December — grew at a 0.8 percent annualized rate, marking a step back from the 2 percent third-quarter pace. Other analysts, drawing on a series of recent disappointing industrial data, expected that growth in the fourth quarter was nearly flat.
Wall Street has faced wild swings since the beginning of the year amid worries of a global economic slowdown. (AP Photo)
An anemic quarter would drive new concerns about the nation’s ability to fight off a series of major headwinds, including a downturn in China — the world’s second-largest economy — and an appreciated dollar that has trimmed profits for American manufacturers. Markets have reflected that turmoil in the first weeks of 2016, with the S&P 500 falling more than 7 percent this month. On Thursday, the Federal Reserve acknowledged that economic growth was slowing down, even though the U.S. labor market remained strong.
The gross domestic product figure for the fourth quarter is only a preliminary figure and will be revised over the next two months.
For the year, economists say, the U.S. economy likely expanded by roughly 2 percent, on par with the underwhelming pace maintained in the aftermath of the Great Recession. In 2014, the economy grew by 2.4 percent; in 2013, it grew by 1.5 percent.
Though many analysts figure the nation is in for more of the same in 2016, some — noting the stock market and dwindling industrial production — see still-modest but increasing risk of a recession.
Those risks come mostly from beyond U.S. shores.
Growth is expected to slow globally this year, most notably in China, where the government has strained to deal with an explosion of debt and a seeming stock market bubble. Meantime, a strong dollar has hamstrung U.S. manufacturers, making their products more expensive overseas. Companies from Johnson & Johnson to Apple have partly blamed the dollar for weaker earnings.
“Two-thirds of Apple’s revenue is now generated outside the United States,” Apple CEO Tim Cook said this week, “so foreign currency fluctuations have a very meaningful impact on our results.” Cook said Apple was dealing with “extreme conditions unlike anything we’ve seen before just about everywhere we look.”
Separate government data released Thursday showed that orders for durable goods — long-term products like washing machines or furniture — fell 5.1 percent in December from the prior month, and fell 3.5 percent for all of 2015. That marked the first annual drop-off in demand since the recession.
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