Yep, US GDP growth was 1.9 per cent last quarter – but business and consumers think Donald Trump is going to keep the economy moving upwards

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The US has confirmed GDP growth in the fourth quarter of last year was a disappointing 1.9 per cent – despite economists expecting 2.2 per cent.

Figures published today confirmed the less-than-encouraging figure, originally mooted last month by the US Bureau of Economic Analysis. The figure put annual growth in 2016 at 1.6 per cent. 

Although the figures published today showed consumer spending had risen by three per cent, rather than the 2.5 per cent originally thought, it wasn't enough to overall growth up.

The news came ahead of a landmark speech by Donald Trump, who is expected to deliver long-awaited detail on his economic policies when he addresses Congress at 9pm UK time.

 Yesterday defence shares popped after it was revealed Trump is set to hike spending in the sector by $54bn (£43bn) – and vowed to "start spending on infrastructure big". 

"Markets have been kept guessing on how quickly the US Federal Reserve will need to lift interest rates over the coming months and will be hoping for some clarity finally on the Trump administration’s tax and spending plans," said Chris Saint, senior analyst at Hargreaves Lansdown Currency Service. 

Mihir Kapadia, chief executive of Sun Global Investments, added: "A substantial fiscal boost through tax cuts is likely to lead to a sell-off in US Government bonds as markets might fear larger than expected deficits going forward. We have an interesting day ahead.”

In a separate survey businesses reported a surge in new orders as a closely watched index of activity rose sharply, while stock levels rose to the fastest in over a year as businesses anticipate continued growth under Trump.

The Chicago business barometer rose by 7.1 points to a reading of 57.4 – a marked acceleration in expansion in the sector (indicated by a reading over 50) – according to data compiler MNI.

Consumers shared in the burst of confidence, another poll by the Conference Board. Their index of confidence rose to a reading of 114.8, up from 111.6 in January. The rise further from the 1985 benchmark score of 100 was driven by a big increase in expectations for the future.

Lynn Franco, director of economic indicators at the Conference Board, said: "Expectations improved regarding the short-term outlook for business, and to a lesser degree jobs and income prospects. Overall, consumers expect the economy to continue expanding in the months ahead.”