Real GDP grew modestly during the 4th quarter, meeting economists’ expectations. Continued sluggishness in business investment held back growth, but personal and government spending continued to increase. The Federal Reserve cut target interest rates once more in the 4th quarter, for a total of three times throughout the year, lowering debt costs amid a trillion-dollar federal budget deficit.
Oil prices rose during the 4th quarter as U.S. crude oil inventories dropped faster than expected. Strong stock market performance, reflecting optimism for a U.S.-China trade deal, also helped bolster oil prices. Crude oil prices ended the quarter at $59.88 per barrel in December, up 5.1% from the previous quarter. Prices for crude oil were 20.9% higher than last December.
The U.S. dollar index declined at the end of 2019, down 1.19% from the 3rd quarter, yet up 0.48% compared with the 4th quarter last year. The dollar weakened as U.S. economic growth slowed relative to other global economies. Progress in the U.S.-China trade war, U.S.-Canada-Mexico trade negotiations, and Brexit dealings in Europe have strengthened economic prospects outside U.S. borders.