The U.S. economy expanded at an annualized rate of 1.9% in the fourth quarter of 2016 and 1.6% in the year as a whole – the slowest rate since 2011 – according to the second reading of gross domestic product (GDP), which the Bureau of Economic Analysis (BEA) released Tuesday morning. 

President Donald Trump is scheduled to address a joint session of Congress Tuesday night. He is expected to provide details on his plans to accelerate economic growth through infrastructure spending, tax cuts, revamped trade policy and deregulation.

The figures, which are are adjusted for inflation and seasonal patterns, are unchanged from the first estimate published a month ago. The fourth quarter's lukewarm expansion marks a slowdown from the previous quarter, when real GDP grew 3.5%. It is an improvement, however, from the fourth quarter of 2015, when growth was just 0.9%. GDP grew 2.6% in 2015 as a whole. 

The BEA's revision shows stronger consumer spending (3.0% growth) than in the prior estimate (2.1%), though business investment and local government spending were lower than previously thought. Net exports, which reduce GDP, contributed -1.7 percentage points to the total.

During the campaign Trump promised growth of 4%, and during the final televised debate he added, "I think you can go to 5% or 6%." Since the economy returned to growth in 2010, real annual output has averaged just 2.1%. Treasury Secretary Steve Mnuchin appears to be trying to manage expectations, telling Congress and Fox News over the previous week that the administration's target was 3% or higher. (See also, Mnuchin Plays Down Trump's Ambitious Growth Target.)

The U.S. economy routinely grew at rates of 5% to 6% in the middle of the last century. Trump has blamed slow growth in recent years on the Obama administration's policies regarding trade and regulation, promising instead to bring manufacturing jobs back to the country, increase exports relative to imports and slash environmental and banking rules that he says stifle growth. He has also promised corporate and individual tax reform, a replacement for Obamacare and a crackdown on immigration. (See also, Obama's Economic Legacy in 8 Charts.)

The immigration crackdown has materialized, and Trump has signed orders expediting the process for approving infrastructure projects, but other aspects of the president's economic platform remain campaign promises. In a budget draft sent to agencies Monday, Trump promised a $54 billion increase in military spending to $603 billion, to be funded by cuts to other federal agencies. In a press conference Monday, White House budget director Mick Mulvaney promised a reduction in foreign aid Monday, which only accounted for $43 billion, or less than 1% of federal spending, in fiscal 2015.

In a statement Tuesday, Barclays Research forecast a "solid pace" of expansion in 2017, but cautioned, "uncertainty regarding our forecasts is higher than usual given the range of potential changes to fiscal and trade policy under the new administration." The statement added, "We will be watching the president’s speech before a joint session of congress today for clarity on the administration's policy priorities."

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