U.S. growth expected to slow from last quarter’s 2.6% pace

WASHINGTON — The U.S. economy turned in a solid performance in 2018, boosted in part by tax cuts and higher government spending. But growth slowed by year’s end, and most economists envision a weaker outlook for the coming months and probably years.

The nation’s gross domestic product, the broadest gauge of economic health, expanded at a 2.6 percent annual rate in the October-December period, the government said Thursday. That was down from a 3.4 percent rate in the July-September period and a sizzling 4.2 percent pace from April through June. During those months, the economy benefited from tax cuts and from higher government spending, the gains from which are thought to be fading.

For 2018 as a whole, GDP growth amounted to 2.9 percent, the government said, the best showing since 2015. It was just below the 3 percent pace the administration has said it can maintain consistently. By contrast, most economists foresee slower growth ahead. For the current January-March quarter, many analysts say they think growth could slow to a 2 percent annual rate or less.

“I think the economy will be steadily throttling back over the next two years,” said Mark Zandi, chief economist at Moody’s Analytics.

The economy’s pace of expansion last quarter reflected a slowdown in consumer spending and the start of a 35-day partial shutdown of the government, which subtracted an estimated 0.1 percentage point from growth. That weakness was offset somewhat by a gain in business investment and less of a drag from trade.