Decline in consumption leads to slowest U.S. economy growth in 3 years

Brexit1321

Brexit1321

The lackluster beginning to 2017 also marks the first quarterly economic report card for President Donald Trump, who has vowed to rev up the US economy.

Gross domestic product increased at a 0.7 percent annual rate also as the government further cut defense spending, the Commerce Department said on Friday in its advance estimate.

The U.S. economy has usually experienced weak performance in the first quarter of each year.

Averaging the first two quarters, economists forecast growth of around 2 percent for the first half of this year.

"Overall, our forecast is for real GDP growth to ease from 1.8 percent previous year to 1.6 percent in 2017 and 1.3 percent in 2018", added Nordea Bank.

The labor market now is close to full employment and the confidence of consumers is close to highs of multi-years, which suggests that the sharp slowdown mostly created by weather in spending by consumers is likely to be short-lived. Trump can't easily say, "I want credit some 2017 economic data, but only the good news, not the bad news". Spending on nondurable goods and services was also soft, up 1.5 percent and 0.4 percent, respectively. Equipment investment grew by 9.1 percent, the strongest growth since it also grew at a 9.1 percent rate in the third quarter of 2015.

NFL Draft: Browns take Michigan DB Jabrill Peppers with No. 25 pick
Two picks later it was the Houston Texans' turn, as they moved up in a trade with Cleveland to take Clemson's Deshaun Watson . Count NFL Combine 40-yard dash record-holder John Ross III, taken No. 9 by the Bengals, among those to shine on the track.

That broadening-out of demand across the USA economy should create a solid picture for the consumer in the second quarter, said Sam Bullard, senior economist at Wells Fargo Securities in Charlotte, North Carolina. In the first quarter of 2017, the economy saw growth of just 0.7%, the smallest rate of growth in 3 years. Because almost a third of this quarter occurred under the final days of the Obama administration, Trump will likely turn the focus of this dismal report to his predecessor.

At the same time, there are reasons to be cautious about signs of wage growth: The employment cost index isn't adjusted for inflation, meaning the real gains to the consumer have been more tepid.

First-quarter GDP also tends to underperform because of difficulties with the calculation of data that the government has acknowledged and is working to rectify.

Business investment, which has been sluggish the last couple of years, increased sharply. While that contribution was rather paltry, it was significantly better than the 1.82 percentage point subtraction from net exports to the headline number in the fourth quarter. "A warm one, as was the case this year, can produce lower utility bills", said Brian Schaitkin, senior economist at the Conference Board.

Most economists believe the economy is picking up speed. The overall GDP deflator rose at a 2.2 percent annual rate, with the core PCE rising at a 2.0 percent annual rate in the quarter. The slowdown in inventory rebuilding cut almost a percentage point from growth in the first quarter. GDP hasn't seen growth of that magnitude since before the financial crisis.

Recommended News

  • Trump appoints anti-abortion leader to Health and Human Services post

    Trump appoints anti-abortion leader to Health and Human Services post

    Yoest's contributions have been key to conservative strategies to claim abortion restrictions are meant to protect women's health. Charmaine Yoest, who actively supported Trump in his campaign, will serve as assistant secretary of public affairs at HHS.
    Britain must settle 'people, money and Ireland' first — EU President's letter

    Britain must settle 'people, money and Ireland' first — EU President's letter

    The two share the same island, and the difficulties of re-establishing a land border are vast and politically fraught. The intervention prompted Prime Minister Theresa May to complain the European Union was ganging up on Britain.

    Monitor: Turkish internet users unable to access Wikipedia

    Prime Minister Binali Yildirim acknowledged at the time that "from time to time for security reasons we can use such measures. About three years ago, the Turkish court ordered that the block on YouTube put in place by the authorities be removed.
  • Cassini Spacecraft successfully penetrates through Saturn's Rings

    Cassini Spacecraft successfully penetrates through Saturn's Rings

    In September, the spacecraft's last dive will have it plummeting straight into Saturn itself, and the probe will be lost forever. The Cassini spacecraft will perform similar manoeuvres during its subsequent dives, the second of which is scheduled for Tuesday.
    Getting defensive: Redskins tab 'Bama DL Jonathan Allen 17th

    Getting defensive: Redskins tab 'Bama DL Jonathan Allen 17th

    In 2016, he led the team with 18.5 tackles for loss, recovered three fumbles and also returned an interception for a touchdown. The draft guide includes 300-plus scouting reports as well as position-specific analytics for prospects in the 2017 NFL Draft.
    Episodes of dystopian drama 'The Handmaid's Tale' are now available

    Episodes of dystopian drama 'The Handmaid's Tale' are now available

    Hulu's excellent adaptation of Margaret Atwood's dystopian novel , The Handmaid's Tale , is a horror show unveiled in slow motion. She also talked about returning to Top of the Lake for a second season, and why she wanted to make sure it would be different.
  • Banned Neymar Joins Teammates In Barcelona's El Clasico Victory

    Banned Neymar Joins Teammates In Barcelona's El Clasico Victory

    Real appeared to have salvaged a point when substitute James Rodriguez converted from close range five minutes from time. And captain Iniesta admits he's still surprised by his team-mate. "After years and years, he continues to be decisive.

    Pitch at Manny Machado's head sparked a heated exchange with Dustin Pedroia

    Pedroia was attempting to turn a double play before Baltimore's Manny Machado slid hard and ended up cleating Pedroia in the calf. Through seven combined starts the two pitchers have thrown 46.1 innings and only allowed eight earned runs in the process.
    China Launches Second Aircraft Carrier

    China Launches Second Aircraft Carrier

    China has launched its second aircraft carrier, marking an incremental rise in its capacity to project power in the West Pacific. But for that, we have to recalibrate our entire naval doctrine, which is easier said than done.
  • NFL Draft Round 2: Falcons Trade Out

    NFL Draft Round 2: Falcons Trade Out

    Indianapolis Colts - Colts defensive end KENDALL LANGFORD will make picks from the INDIANAPOLIS ZOO , along with staff personnel. I'm afraid they're going to think they are so good they may panic and give up a bunch of draft picks for one big player.
    Student injured in machete attack at university coffee shop

    Student injured in machete attack at university coffee shop

    He stated that he was driven "to an overdose", because of his "lack of friends" and "the constant bullying", he experienced. At the time of the attack, University officials said the cafe, a 'popular gathering spot' was packed with around 30 people.

    Presidential hopeful Macron hunts for France's rural vote

    Aliot said that Jalkh is contesting allegations of Holocaust denial, a crime in France. Her opponent, the independent centrist Emmanuel Macron is the favorite.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.