The US economy finished 2016 on a soft note, the government reported, lowering the annual pace of growth to 1.6 per cent, the lowest level in five years.
That is less than half the rate President Donald Trump vowed he could deliver during the campaign - a promise repeated on the White House website - and the economy's underlying lack of momentum complicates the new administration's plans. ( Fourth-quarter growth came in at 1.9 per cent v a forecast of more than 2 per cent.)
Indeed, the latest data underscores why analysts say Trump's growth rate target of 4 per cent is audacious at best, fanciful at worst, especially given the 2 per cent or so growth that has prevailed since the current recovery began in 2009. Last year's increase in output also represented a drop from the 2.6 per cent rate recorded in 2015.
What is more, although the Commerce Department report covered the last three full months of President Barack Obama's second term, anaemic economic activity could add to the revenue shortfall the federal government will likely face from the personal and corporate tax cuts Trump has discussed.
"It's difficult to see how we would get to 4 per cent growth given the current structure of the economy, especially demographics and productivity growth," said Gus Faucher, deputy chief economist at PNC Financial Services in Pittsburgh. "That would be true no matter who is the president."
The retirement of the baby boomers will hold back any expansion of the labour force, he said, while productivity gains from technology are not expected to accelerate from the current level, as they did with consumer adoption of the internet or mobile phones in the 1990s.
On the other hand, weak growth does strengthen arguments for a US program to fortify the nation's infrastructure - an effort Trump has advocated and which could provide an economic stimulus.
And it is sure to be invoked to validate his fundamental campaign argument: That whatever the decline in the official unemployment rate, the economy has been underperforming in a way that demands new policies.
Currency challenge
Still, there are some familiar economic headwinds the new administration will have to confront. The strengthening dollar could further hurt US exports and worsen the trade balance, a major factor in the weakness in the fourth quarter.
At the same time, the Federal Reserve has signalled that it is ready to raise interest rates a few times this year, and a faster rate of expansion would only accelerate the Fed's plan to tighten monetary policy to head off inflation.
For the fourth quarter alone, the economy expanded at an annual rate of 1.9 per cent. Experts had expected growth of just over 2 per cent. The Commerce Department will make two revisions of the figure over the next two months that could change the number.
The data was complicated this time by the aftereffects of a surge in soybean exports in the third quarter, which lifted growth in the period to the highest level in three years.
Since the surprise victory of Trump in November, many economists have been raising their projected growth rates for the latter half of 2017 and for 2018.
That is not necessarily because they feel Trump policies will prove beneficial in the long run. Instead, it is because two of his proposals - tax cuts and infrastructure investments - could bolster the economy in the short term.
Federal deficit red flag
Faucher lifted his growth forecast to 2.4 per cent in 2017 and 2.7 per cent in 2018. Previously, he expected output to expand by 2.25 per cent in each year.
"Tax cuts and infrastructure spending represent a much more expansionary fiscal policy than we've had in some time," he said.
But Faucher cautioned that increasing the federal deficit, which stood at $US587 billion in 2016, by hundreds of billions more in the coming years could increase interest rates, which were already moving higher.
The rates, including mortgage rates for home buyers, were already up more than half a percentage point since the election, on expectations of more borrowing and faster growth.
But in economics, as in life, everything cuts both ways. The rise in interest rates has also strengthened the dollar relative to other currencies.
While that has been good news for US tourists, a stronger currency is bad news for US exporters, especially manufacturers, because it makes imports cheaper while lifting the price of US-made products overseas.
"Mr Trump can't control the dollar, and that will be a big factor this year," Faucher said. "Trade is likely to be a drag on growth."