Posted on 04/28/2017 7:32:29 AM PDT by SeekAndFind
WASHINGTON – The U.S. economy turned in the weakest performance in three years in the January-March quarter as consumers sharply slowed their spending. The result underscores the challenge facing President Donald Trump in achieving his ambitious economic growth targets.
The gross domestic product, the total output of goods and services, grew by just 0.7 percent in the first quarter following a gain of 2.1 percent in the fourth quarter, the Commerce Department reported Friday.
The slowdown primarily reflected slower consumer spending, which grew by just 0.3 percent after a 3.5 percent gain in the fourth quarter. It was the poorest showing in more than seven years.
Economists attributed the sharp slowdown in consumer spending to shrinking utility bills due to warmer weather, a drop-off in auto sales and a delay in sending out tax refund checks by the IRS, which also dampened spending.
Sal Guatieri, senior economist at BMO Capital Markets, said he expected consumer and government spending to bounce back, leading to a much stronger second quarter.
"Still, the report will mark a rough start to the administration's high hopes of achieving 3 percent or better growth, not the kind of news it was looking for to cap its first 100 days in office," Guatieri said in a note to clients.
Averaging the two quarters, they forecast growth of around 2 percent for the first half of this year. That would be in line with the mediocre performance of the eight-year economic expansion, when growth has averaged just 2.1 percent, the poorest showing for any recovery in the post-World War II period.
(Excerpt) Read more at foxnews.com ...
What would the consumer spending impact be if 15 million illegal households didn’t file returns for their EIC for the first time in 10+ years? ~5K/family not available for spending?
44’s term ended on Jan 20 so not even a full month of the first quarter was under his admin.
It’s real news, alright, but so what. Warm weather happens. Tax refunds get delayed. Holiday spending and Black Friday come and go. Big deal.
There are many components to those figures. Things like government spending goes into GDP, even if the government had to borrow or create the money.
Likewise, consumer spending includes things like basic bills, which drag down discretionary spending, and affect borrowing...so in the short term, gross numbers may be precursors one way, or obscuring a large movement the other way.
There are a lot of good underlying trends right now, but it’ll be a couple of quarters before we can see the next steps.
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