US Raises Q1 Growth In Revision, Consumer Spending Levels A Concern

(IDEX Online) – The US Commerce Department has revised upwards growth in the first quarter to a 1.2 percent annual rate instead of the 0.7 percent reported last month.

However, although economy slowed less than first thought in the first quarter, reduced business investment and consumer spending mean that any expectations of a sharp rise in growth in the second quarter are unlikely to come about.

Although consumer spending, which accounts for close to 70 percent of US economic activity, increased by just 0.6 percent rate instead of the previously reported 0.3 percent, it was nonetheless the slowest pace since the fourth quarter of 2009.

The1.2 percent annual rate of growth was the worst showing in a year, after a 2.1 percent growth rate in the fourth quarter.

Most of all, the weakness in the first quarter has dealt a body blow to President Donald Trump's claims that Americans would immediately see rising economic growth.

Trump claimed during the presidential campaign that annual GDP growth would rise to 4 percent.

He promised corporate and individual tax cuts to boost growth.