According to new data published this morning, the economy grew 2.1% in the fourth quarter of 2019. That’s the slowest quarter of economic growth we’ve experienced in three years and leaves 2019 with an average growth rate of 2.3%, which is slower than both 2017 and 2018. These numbers reflect an economy that is cooling, despite record low unemployment.
The growth we saw, which was in line with expectations, was largely driven by consumer spending. In contrast, businesses continue to be hesitant to invest. Consumers, who have jobs and are seeing modest pay increases, are confident about the economy, while businesses that anticipate a looming recession are proceeding with caution as they see slowing global markets and trade tensions as a persistent concern.
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Beth Akers is a senior fellow at the Manhattan Institute and a former Council of Economic Advisors economist. Follow her on Twitter here.