Five charts showing why US GDP growth fell so much in the fourth quarter

Emma Haslett
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US growth hit a disappointing 2.6 per cent in the fourth quarter (Source: Getty)

Today's US fourth quarter GDP growth figure was a disappointing affair - not only did it come in below expectations of three per cent growth, but at 2.6 per cent, it was almost half the level posted in the third quarter of 2013.

What's going on? There are a few explanations.

1. The obvious one is that oil prices have plummeted

Although the US is one of the producers least affected by the fall in oil, there's no doubting it's had an impact - partially from a fall in investment in the shale gas sector.

2. The trade deficit was higher than it's been since the second quarter of 2013

Imports are "a subtraction in the calculation of GDP", said the Bureau of Economic Analysis (BEA)

3. Fixed investment has been erratic - but now it's falling, fast

Even by its volatile standards, the fall in fixed investment is a bit of surprise.

4. Federal government spending fell off a cliff

This was hardly surprising: quarter-on-quarter growth growth in federal spending has been negative every period for two years, except the third quarter of 2014. Still, it was a big drop.

5. ... and although personal expenditure was up, there are worries it's all that's driving growth

The US has been the darling of the global economy lately, but are consumers the only ones driving that? The concern is the country will sink back into a spiral of debt-fuelled spending, which isn't good for anyone. So keeping a lid on borrowing, and shoring up other industries - such as manufacturing - is critical if the US is to sustain strong growth.

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