1st quarter growth struggles, disappoints
WASHINGTON — The economy stumbled at the start of 2017, expanding at its slowest pace in two years in a demonstration of the difficulty President Donald Trump will have in boosting growth to a much stronger sustained level.
Total economic output, also known as gross domestic product, increased at just a 0.7 percent annual rate from January through March as consumer spending posted its worst performance in more than seven years, the Commerce Department said Friday.
The economy grew at a 2.1 percent annual rate in the fourth quarter of last year.
“Growth of less than 1 percent means the wheels are up, but the economy’s engines cannot gain any altitude,” said Chris Rupkey, chief financial economist at Mitsubishi UFG Financial Group in New York. “Trump’s economics team needs to step up their game as the economy is starting out the year in a hole.”
Analysts had forecast a first-quarter slowdown, but the 0.7 percent growth was below expectations. It was the worst since the first quarter of 2014, when unusually bad weather hit much of the country.
In unveiling a tax overhaul plan this week that
NEW YORK — Stocks ended slightly lower on Wall Street, narrowly missing a fourth record high close this week for the Nasdaq composite index.
The Dow Jones industrial average slipped 40.8 points, or 0.2 percent, to 20,940.51 The Standard & Poor’s 500 index fell 4.6 points, or 0.2 percent, to 2,384.2 The Nasdaq composite fell 1.3 point, less than 0.1 percent, to 6,047.61. would slash business rates, Treasury Secretary Steven Mnuchin said the administration hoped it would lead to sustained growth of 3 percent a year.
But economists said an aging U.S. population and unhealed scars from the Great Recession made that a stretch.
Consumer spending grew 0.3 percent in the first quarter, down from 3.5 percent the previous quarter.
Commerce Secretary Wilbur Ross, one of the administration’s top economic policymakers, said that the weak first quarter performance showed the need for the new policies Trump is offering.
“We need the president’s tax plan, regulatory relief, trade negotiations and the unleashing of (the) American energy sector to overcome the dismal economy inherited by the Trump administration,” Ross said in a statement.
The slowdown was driven by a steep drop-off in purchases of long-lasting durable goods, such as automobiles, appliances and electronics.
After an 11.4 percent increase in the fourth quarter, those purchases declined 2.5 percent in the first three months of this year.