US economy grew at 2.1pc rate in Q4 but virus threat looms

WASHINGTON (AP) — The United States (US) economy grew at an annual rate of 2.1 per cent in the final quarter (Q4) of last year, but damage from the spreading coronavirus is likely depressing growth in the current quarter and for the rest of the year.

The overall pace of growth in the October-December quarter was unchanged from its initial estimate a month ago, though the components were slightly altered, the Commerce Department said on Thursday.

A slowdown in business restocking was less severe than first believed. But a cutback in business investment in new equipment was more of a drag on growth than initially thought.

Economists have been downgrading their forecasts for the first quarter of this year as fears of the impact of the virus has escalated. Stock markets have plunged this week on news that the number of coronavirus cases worldwide has now topped 81,000.

On Thursday, the Dow Jones Industrial Average plunged 4.4 per cent, intensifying a weeklong market rout as investors worried that the coronavirus outbreak will seriously damage the global economy.