U.S. economic growth revised down

But slight dip leaves it at a still-solid 2.5 percent for fourth quarter.

U.S. economic WASHINGTON — growth was revised down slightly to a still-solid 2.5 percent annual rate in the final three months of last year, as businesses spent less on investment and restocking shelves than the government had previously estimated.

The fourth quarter advance in the gross domestic product, the economy’s total output of goods and services, followed even faster increases of 3.1 percent at a seasonally adjusted annual rate in the second quarter and 3.2 percent in the third quarter, the Commerce Department reported Wednesday.

Consumer spending raced ahead at the fastest pace since the spring of 2016, although some of the components such as purchases of furniture and clothing were revised lower. However, these declines were offset by stronger spending on services such as utility bills.

Factors in the downward revision included a greater slowdown by businesses in spending to build up their stockpiles and weaker business investment on structures and intellectual property. The various small revisions pulled down GDP from the initial estimate of 2.6 percent growth.

Economists said the small changes were unlikely to change the upbeat assessment of the economy that Federal Reserve Chairman Jerome Powell delivered to Congress on Tuesday.

“The Fed already knew that the economy had healthy momentum to end 2017 so this does little to change its thinking on the outlook,” said Leslie Preston, senior economist at TD Economics.

For the year, GDP rose 2.3 percent, a significant pick-up from 1.5 percent in 2016, which had been the slowest annual growth rate since the economy contracted in the recession year of 2009.

President Donald Trump has often pointed to the pickup in growth last year as evidence that his economic program of tax cuts, deregulation and stronger enforcement of trade deals was working. During the campaign, Trump promised to double growth, which has averaged 2.2 percent since the recession ended in mid-2009. The current expansion is in its ninth year, making it the third longest on records going back to the 1850s.

Trump has said he expects to achieve GDP growth of 4 percent or better, although his new budget is based on an expectation that the economy will expand at average annual rates of 3 percent over the next decade. The 3 percent GDP forecast has been challenged as overly optimistic by private forecasters who point to the retirements of the baby boom generation and lagging productivity as factors likely to constrain GDP growth.