US growth for Q1 better than expected

WASHINGTON • United States economic growth last quarter was revised down by less than expected amid stronger consumption and exports than initially reported, suggesting the expansion was on relatively firm footing before President Donald Trump's escalation of the trade war with China.

Inflation-adjusted gross domestic product (GDP) increased at a 3.1 per cent annualised rate in the first quarter, compared with an initially reported 3.2 per cent and analyst estimates for a revision to 3 per cent, Commerce Department data showed yesterday.

Consumer spending, which accounts for the majority of the economy, grew 1.3 per cent, topping projections for an unrevised 1.2 per cent though still the slowest in a year.

The figures may alleviate some investor concern that the economy is losing momentum and potentially help Mr Trump as he starts his re-election campaign.

At the same time, recent reports suggesting a dimmer outlook this quarter, along with the intensifying tariff conflict, are casting a shadow over an expansion poised to become the nation's longest on record in July.

Excluding the trade and inventories components that gave a boost to GDP, final sales to domestic purchasers increased at a 1.5 per cent pace - the slowest since 2015, though revised from 1.4 per cent.

This measure, often looked to by economists as a gauge of underlying demand, suggests growth in the quarter was weaker than the headline number indicates.

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A version of this article appeared in the print edition of The Straits Times on May 31, 2019, with the headline 'US growth for Q1 better than expected'. Print Edition | Subscribe