Growth was expected to be 1.4%.
Experts doubted that the tax cuts would unleash growth significantly north of 3 percent, particularly in the long-term.
And 2.6 percent growth is not considered a bad number, but it does underline how hard it will be for the administration to match its lofty promises.
In another sense, though, the increase in imports is a measure of the state of American manufacturing - that USA companies are not yet operating at a level of efficiency or quality that allows them to compete as strongly as we'd like to see against foreign producers. And as we've often said, 3.0 percent is only a milestone on the way to the real goal or 4.0 percent or even 5.0 percent.
But some things are still holding the economy back.More news: Casey Affleck Declines Presenting Oscars Best Actress Award
This is the slowest rate of GDP growth since 2012, said the ONS.
'Other services - notably consumer facing sectors - showed much slower growth.
Business investment didn't rise as quickly at the end of the year. "Both on the consumer and the business side, there's a lot of momentum". That tends to ebb and flow every six months or so.
Yes, the Referendum and the ensuing fall in the value of sterling were more than a year-and-a-half ago but because many retailers buy their stock a year or two ahead, the increased cost of imports has only started to bite in the past few months.
Current-dollar GDP increased 4.1 per cent, or $762.3 billion, in 2017 to a level of $19,386.8 billion, compared with an increase of 2.8 per cent, or $503.8 billion, in 2016.More news: Donald Trump apologizes for retweeting far-right British group
Growth was boosted by the services sector which increased 0.6%, compared to the 0.4% rise in the third quarter. But it has also been stubbornly stuck in a modest pace, slower than the expansions in the 20th century.
Independent economists also predict the cuts will goose the economy, at least in the short term, but not at rates anywhere near what the White House is promising.
Despite the slowdown, economists expect the USA economy to expand by 3% this year, spurred by the weak dollar, rising oil prices and a strong global economy.
Economists suggested that although the growth missed predictions, it was still strong.
For now, the International Monetary Fund is also projecting that Mexico, while mired in the uncertainty of ongoing NAFTA discussion with the United States and Canada, will also show incremental improvement with 2.3% growth in 2018 and 3.0% in 2019. Trump has threatened to withdraw altogether if negotiations don't produce a deal he thinks will create American jobs.More news: Smith, founder of British post-punk band The Fall, dies at 60
"The Trump administration had targeted three per cent growth but despite the latest figures falling below expectations, the President still has reasons to be bullish".
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