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Expand chart
Data: Bureau of Economic Analysis; Note: Shows GDP average over the full year vs. prior year; Chart: Andrew Witherspoon/Axios

U.S. gross domestic product grew at a 2.1% annual rate in the final quarter of last year, the Commerce Department said on Thursday. For all of 2019, economic growth came in at 2.3% — less than the 2.9% in 2018.

Why it matters: The initial estimates from the government show that 2019 was the slowest pace of economic growth since Trump took office. The boost from the tax cuts gave way to pain from the trade war. Exports slumped last year, while uncertain business leaders held off on spending.

Details: Trump succeeded in fundamentally shifting the U.S. trade balance. Net exports added nearly 1.5 percentage points to GDP in the fourth quarter, though experts warn the gain was likely unsustainable.

  • Stephen Gallagher, chief U.S. economist at Societe Generale, said he expected a "major reversal" of the trade balance in the first quarter that would deduct one percentage point from first quarter GDP.
  • He also renewed the institution's forecast of a recession this year.

By the numbers: Q4 marked the third straight quarter of declining business investment — i.e. corporations investing in new equipment or factories.

  • There was a notable decline in inventories while overall gross private domestic investment fell 6.1% during the quarter.
  • Consumer spending is still solid, but showed some signs of slowing. The rate of spending was 1.8% in Q4, a drop-off from the 3.2% in the prior quarter.

What they're saying: The report drew the ire of trade groups opposed to Trump's tariffs on China, which remain largely in place even after the "phase one" deal.

  • “Tariffs are paid by American consumers and businesses, and prevented the U.S. economy from reaching its full potential last year," according to a statement from Americans for Free Trade, a coalition of businesses, farmers and manufacturers that's launched a multimillion dollar campaign against Trump's tariffs.
  • "It’s clear the trade war and tariffs are still impacting American businesses, workers, and consumers."

The bottom line: 2019 GDP came in above the economy's postrecession average of around 2% growth, as Marketwatch points out. Still, annual growth under Trump hasn't hit the administration's promise of 3%.

  • What they're saying: Heading into an election year, economic growth is "on unsteady footing," thanks to the indefinite production halt of Boeing's 737 Max and "global growth headwinds that may pick up linked to the coronavirus crisis across the globe," Joseph Brusuelas, chief economist at RSM US, wrote in a note to clients.

Go deeper: Nobel laureate Joseph Stiglitz calls for the end of GDP

Go deeper

Texas abortion law remains in effect after appeals court ruling

Pro- and anti-abortion protesters outside the Supreme Court as arguments begin about the Texas abortion law on Capitol Hill in November. Photo: Jabin Botsford/The Washington Post via Getty Images

A U.S. appeals court transferred a challenge to Texas' law banning most abortions after about six weeks of pregnancy to the state supreme court in a 2-1 vote on Monday evening.

Why it matters: The 5th U.S. Circuit Court of Appeals' decision means the country's most restrictive abortion law can remain in place for the time being.

2 hours ago - World

At least 2 dead after Tonga volcano eruption and tsunami

A satellite image of the explosive eruption of the Hunga Tonga-Hunga Ha'apai volcano on Saturday. Photo: UNICEF/NOAA

At least two people are confirmed to have died in Tonga following the undersea volcanic eruption that sent tsunami waves toward the island nation and across the Pacific over the weekend, officials said Monday.

The big picture: Officials reported major damage along the western coast of the main island of Tongatapu, where the capital, Nuku'alofa, was covered in ash and dust, including on the runway of the airport. A New Zealand Ministry of Foreign Affairs spokesperson told Axios over the phone that two people had been confirmed to have died in the disaster.

Airlines call for Biden admin's "immediate intervention" in 5G deployment

Photo: Tayfun Coskun/Anadolu Agency via Getty Images

The CEOs of leading U.S. air cargo and passenger carriers on Monday warned the Biden administration there could be "catastrophic disruption" after AT&T and Verizon deploy a new 5G service this week.

Driving the news: They said in a letter to Transportation Secretary Pete Buttigieg and other top federal officials ahead of the C-Band 5G service's deployment Wednesday that "the nation's commerce will grind to a halt" and "could potentially strand tens of thousands of Americans overseas."