US economic growth slows in the first quarter of year

30 Apr 18

The economic growth in the US slowed to an annualised rate of 2.3% in the first quarter of this year, the Commerce Department has said.

The figure is above the predicted 2%, but down from the growth in the fourth quarter of 2017, when it reached 2.9%.

Government spending also slowed, rising by 1.2% in the first quarter of this year compared to 3% in the fourth quarter of last year, as both federal, state and local spending cooled.

Despite the international attention on president Donald Trump’s new tariffs on steel and aluminium, trade added 0.2 percentage points to the economic growth.

Countries, including EU member states and China, have threatened to retaliate if they are not exempted from the imposed 25% on steel and 10% on aluminium.

Consumer spending, which is the biggest part of the economy, rose by 1.1%, marking the smallest gain since 2013.

The growth was the best for any January-March period since 2015, Bloomberg said.

The that analysts expect growth to accelerate in the next quarter as US workers begin to see the impact of Trump’s $1.5trn income tax package.

Last month, a US spending bill was drawn up, which set out $1.3trn to fund the government through September.

The OECD has warned that protectionism and trade wars could harm the global economic recovery.

 

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