US economic growth slowed to 0.7 percent, weakest rate in 3 years
American consumers pared spending in the first quarter, leading to the weakest performance for the U.S. economy in three years.
The pattern is a familiar one during the economic recovery, as consumers have fallen into a pattern of sharply slowing their spending during the first three months of the year. The lackluster beginning to 2017 also marks the first quarterly economic report card for President Donald Trump, who has vowed to rev up the U.S. economy.
The Commerce Department says gross domestic product -- the country's 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 slowdown primarily reflected slower consumer spending, which grew by just 0.3 percent. That was the poorest showing in more than seven years. Analysts blamed in part the unusually warm winter of 2017, which meant less spending on utility bills, among other household needs.
Many economists believe the slowdown will be temporary and forecast GDP growth will rebound to around 3 percent or better in the current quarter.
Still, the latest GDP figures came in below the 1 percent increase that had been forecast by many economists. Oxford Economics economics chief Gregory Daco predicted first-quarter growth to come in around 0.9 percent.
"However, we anticipate rosier days for the US economy," he wrote in an April 21 research note. "We expect that firming wage growth, rising employment and upbeat confidence will lead to a rebound in real consumer spending in the coming quarters."