Washington, June 28 (IANS) The US economy grew at a two per cent annualized rate in the first quarter of 2018, two-tenths of a percentage point below the second reading on the gross domestic product (GDP) released in May, the Commerce Department said on Thursday.
This is the government’s third and final estimate of GDP between January and March. The numbers surprised analysts, who had estimated a slight improvement to a 2.3 per cent growth rate, Efe news reported.
The slowdown in GDP growth during the first quarter reflected a drop in consumer spending, exports, federal, state and local government spending and a drop in fixed residential investment.
Consumer spending, which accounts for nearly two-thirds of GDP in the US, was revised downward from 1 per cent to 0.90 per cent after posting a 4.4 per cent rise in the previous quarter, the Commerce Department said.
Business investment, however, showed a robust increase of 5.8 per cent in equipment purchases, compared to a 5.5 per cent rise in the previous estimate, indicating corporate optimism about the economy.
The first-quarter GDP figures came in far below President Donald Trump’s promise to put the country on track for 3 per cent economic growth with tax cuts for businesses and individuals.