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The economy slowed less than expected in the fourth quarter amid solid consumer and business spending, leaving 2018 growth just shy of the Trump administration's 3 percent annual target.

The Commerce Department's gross domestic product report on Thursday offered the latest assessment of the impact of President Donald Trump's economic policies, including deregulation, tax cuts, increased government spending and tariffs aimed at securing more favorable trade deals.

Trump has touted the economy as one of the biggest achievements of his presidency and declared last July that his administration had "accomplished an economic turnaround of historic proportions."

Gross domestic product increased at a 2.6 percent annualized rate in the fourth quarter after expanding at a 3.4 percent pace in the July-September period. The economy grew 2.9 percent in 2018, the best performance since 2015 and better than the 2.2 percent logged in 2017.

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Economists polled by Reuters had forecast GDP rising at a 2.3 percent rate in the fourth quarter. The release of the fourth-quarter GDP report was delayed by a 35-day partial shutdown of the government that ended on Jan. 25, which affected the collection and processing of economic data.

The Commerce Department said while it could not quantify the full effects of the shutdown, it estimated the partial closure had subtracted about one-tenth of a percentage point from fourth-quarter GDP growth through "a reduction in the labor services supplied by federal employees and reduction in intermediate purchases of goods and services by non-defense agencies."

It also said the fourth-quarter GDP growth estimate was "based on source data that are incomplete or subject to further revision by the source agency."

There are signs the economy slowed further early in the first quarter, with most manufacturing measures weakening in January and February.

The economy is cooling as the boost from the White House's $1.5 trillion tax cut and increased government spending fades. Growth is also being restrained by a trade war between the United States and China, which economists say is making businesses and households more cautious about spending.

The slowdown comes at time when the economy's outlook is also being clouded by signs of cooling global demand and uncertainty over Britain's departure from the European Union.

These factors support the Federal Reserve's "patient" stance towards raising interest rates further this year. Fed Chairman Jerome Powell reaffirmed the U.S. central bank's position in his testimonies before lawmakers on Tuesday and Wednesday.

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a still strong 2.8 percent rate in the fourth quarter. Consumer spending increased at a robust 3.5 percent rate in the third quarter.

Trade tensions with China could constrain the economy for a while. U.S. Trade Representative Robert Lighthizer told lawmakers on Wednesday that Washington's issues with China were "too serious" to be resolved with promises from Beijing to buy more American goods and a threat of higher tariffs could loom over trade with China for years.