US 2019 GDP grew 2.3%, down slightly from 2018; outlook for 2020 steady

The US economy grew at an annual rate of 2.3 percent in 2019, down from growth of 2.9 percent in 2018, but the outlook for 2020 is for a moderate but steady expansion, the Commerce Department said Thursday.

The economy grew 2.1 percent in the fourth quarter, suggesting it will expand next year, but at a rate below US President Donald Trump's goal of 3 percent.

The Congressional Budget Office projects GDP growth of 2.2 percent this year.

"When you add in the benefits of the US-Mexico-Canada and the Phase One deals with China, the two trade deals with Japan and the re-working of the free trade agreement with South Korea, America is back and competing on the world stage," Commerce Secretary Wilbur Ross said Thursday in a statement.

In 2019, the US gross domestic product, the value of all goods and services provided in one year, totaled $21.43 trillion. The growth in goods increased 4.7 percent while services grew by 1.7 percent, the Commerce Department said.

Consumer spending, which represents about two-thirds of the US economy, increased by 2.6 percent in 2019.

The US Federal Reserve cut interest rates three times in the second half of 2019 to boost the economy amid a worldwide economic slowdown. The Fed held rates steady at its meeting Wednesday.

The current economic expansion began in mid-2008 and became the longest on record in July 2019. However, the average growth rate hasn't climbed much above 2 percent, below the 2.9 percent rate during the 2001-2007 expansion and the 3.6 percent rate between 1991 and 2001, government statistics show.

At a news conference after the Federal Open Market Committee meeting, Fed Chairman Jerome Powell said he was optimistic about the global economic outlook because indicators suggest the recent slump in manufacturing may have bottomed out.

"I think we've learned quite a lot of good things about the labor market," Powell told reporters Wednesday. "Good things suggesting that there's been more room to run."

However, spread of the coronavirus in China and isolated cases in the US and elsewhere create uncertainty. China has shut down the city of Wuhan, the center of the outbreak, and a prolonged outbreak could disrupt production and ripple through the world economy.

The US economy also faces a downdraft from the worldwide grounding of Boeing's best-selling plane, the 737 MAX. On Wednesday, Boeing reported a loss of $636 million in 2019 — its first loss since 1997. The MAX has been grounded since March 2019 and may not be recertified for commercial service until this summer.

The Commerce Department said personal income reached an all-time high of $18.6 trillion in 2019, up from $17.8 trillion in 2018.

Unemployment is near a 50-year low. The labor force participation rate, the percentage of all people aged 16 to 64 who are employed or seeking work, rose to 63.2 percent in 2019 from 62.4 percent in 2015, government statistics show.

A tight labor market drives up wages as employers must pay more to attract and retain skilled workers.

The personal savings rate increased to 8 percent in 2019. Americans saved $1.31 trillion in 2019, up from $1.21 trillion in 2018. Savings banks often invest in housing and other real estate projects.