-Michael Gapen, chief United States economist at Barclays
The world's number once economy slowed its growth pace in the final quarter of the year, even despite the solid hiring and falling gasoline prices. The main drag came from exports as US top trading partners have been struggling to grow recently. The Commerce Department reported that the US gross domestic product, the broadest measure of goods and services produced across the economy, rose at a 2.6% annual rate in the fourth quarter. The economy grew 5% in the third quarter and 4.6% in the second quarter after slowing down in the first three months of the year. Lower energy prices, along with a improving labour market, helped boost consumer spending last quarter and most economists forecast these tailwinds to underpin the US economy in 2015. The slowdown in the December quarter was largely due to the deteriorating growth overseas as Japan slipped into yet another recession, Europe is on the verge of another slump and struggling with deflation and China's years of double-digit growth remained in the past. Export growth to those countries continued to slow as it rose at a 2.8% rate, compared with the third quarter's 4.5% pace.
For 2014 as a whole, GDP expanded 2.4%, only slightly better than the average 2.2% growth of 2010-2013, a moderate pace compared to prior growth periods. During the 1990s the economy grew an average 3.4% a year.
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