Published: Sat, April 28, 2018
Markets | By Erika Turner

USA growth of 2.3 per cent slows but beats forecasts

USA growth of 2.3 per cent slows but beats forecasts

And while the GDP is down this quarter, due in part to weak consumer spending, it's still the highest growth of any January-March period in three years.

According to the Commerce Department, GDP increased at a 2.3% annual rate, above the 2% analysts polled by Reuters were expecting.

Consumer spending (which accounts for more than two-thirds of the country's GDP) grew just 1.1 percent in the first quarter of 2018, the lowest rate since 2013. First-quarter growth is usually slower than the rest of the year, and often ends up being revised higher when it's seasonally adjusted. They expect a bounce back in the coming months, and preliminary estimates point to 3.6% growth in the second quarter. The data comes after the fourth quarter previous year grew 2.9%.

But economists attributed the spending drop to seasonal effects and a pullback after the strong holiday shopping season.

The 2.3% pace of GDP growth still is faster than what the Federal Reserve sees as the economy's long-term potential rate, and officials previously have said they view the first-quarter slowdown as transitory, with the economy poised to reach a milestone in May - the second-longest expansion on record.

Acknowledging that forecasters expected economic growth to slow in the first quarter, Hassett said he remained confident the USA still would hit 3 percent growth for all of 2018. The economy may expand 2.8 percent in 2018, according to the median of forecasts compiled by Bloomberg, before slowing in the following two years.

"Tax cuts and government spending increases should lead to better overall economic activity", said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. Households also boosted savings, which bodes well for a pickup in spending. Consumer spending, which typically drives growth, increased by only 1.1 percent, down from 4 percent last quarter.

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Data in the archive will also show how many people may have seen each ad, and how much was paid for their display. Collins also had little time for the idea that Facebook's privacy toggles offer users genuine choice.

Current-dollar GDP increased 4.3 percent, or $211 billion, to a $19.9 trillion level. And we won't know the answer to that question for several years at least. Investment in nonresidential structures, including office buildings and factories, rose 12.3%, the most in a year.

The slowdown in USA consumer spending reflected slower auto sales as well as purchases on clothing, footwear, food and beverages, according to the report.

But Trump and Republicans strongly criticized former President Obama for not having a single calendar year in which economic growth hit 3 percent.

Investment in homebuilding was unchanged in the first three months of the year, reflecting a decline in brokers' commissions as an acute shortage of properties hurt home sales.

The stronger than expected GDP growth reflected positive contributions from non-residential fixed investment, consumer spending, exports, private inventory investment, and government spending.

The program, which offers speedier delivery of purchases and other perks, will cost $119 a year in the USA beginning May 11, up from the $99-a-year rate available since 2014, the company disclosed Thursday on a conference call with financial analysts after reporting quarterly earnings.

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