Analyst: Slowdown in GDP no cause for concern
WASHINGTON - Although a slowdown in economic growth is helping to send stocks lower today, one private analyst says it's nothing to worry about.
Growth slowed to a 2.6 percent pace in the fourth quarter of 2014, as a big burst in consumer spending was offset by weakness in other areas. It was down from a sizzling 5 percent gain in the previous quarter.
But Paul Ashworth of Capital Economics says the slowdown was heavily influenced by a swing in the defense spending category, which had jumped sharply in the summer. He says the acceleration of consumer spending is more of an indication of where the economy is headed.
For 2014 overall, the economy grew a moderate 2.4 percent. The year began on a sour note as a brutal winter sent the economy into reverse. GDP dropped at a 2.1 percent annual rate in the first quarter. But the economy rebounded, with growth averaging a 4.1 percent annual rate over the next three quarters.
Americans appear poised to keep the economy expanding at a solid pace. Today, the University of Michigan reported that its index of sentiment showed that U.S. consumers are more confident than they have been since January 2004.