The US economy grew at an annualised rate of 3.1 per cent in the first quarter of this year, according to the government, which concluded its third and final reading of the gross domestic product (GDP) for the period, in which the economy grew in line with expert forecasts and at a rate well above the 2.2 per cent growth registered in the fourth quarter of 2018.
The Commerce Department report showed the economy grew at the highest rate for a January-March period in four years. The figure also fulfils President Donald Trump’s promise to get the economy growing at more than 3 per cent during his term.
GDP growth, however, has been slowing gradually since the second quarter of 2018, when the economy expanded at an annualised rate of 4.2 per cent, prompting some economists to forecast an economic slowdown that still has not materialised.
Spending by State and local governments, foreign trade and inventory investment were the components of the GDP that powered the economy in the first quarter of this year, the Bureau of Economic Analysis (BEA), the Commerce Department agency responsible for calculating the economic indicator, said.
In the first quarter, however, consumer spending, which accounts for about two-thirds of US economic activity, grew at an annualised rate of just 0.90 per cent, the lowest rate in the past year, due to greater than expected weakness in the service sector. The consumer spending number was well below the 2.5 per cent increase registered in the fourth quarter of 2018.