1st-quarter economic growth at 2.3 percent

WASHINGTON — The U.S. economy slowed to a moderate 2.3 percent annual growth rate in the first quarter as consumer spending turned in the weakest performance in nearly five years.

Still, the January- March increase came in better than expected, supporting hopes for a solid rebound for the rest of the year.

The Commerce Department reported Friday that the gain in the gross domestic product, the economy’s total output of goods and services, followed a 2.9 percent rise in the fourth quarter and gains above 3 percent in the previous two quarters.

Many economists had forecast that growth would slip below 2 percent in the first quarter, reflecting a big pullback by consumers after a torrid pace of spending in the fourth quarter. Recent history has shown a pattern of weakness in the first quarter, reflecting in part seasonal data quirks. Analysts expect growth to surpass 3 percent in the current quarter.

Consumer spending, which accounts for 70 percent of economic activity, decelerated sharply from a 4 percent growth rate in the fourth quarter to a 1.1 percent pace in the first quarter.

That was offset somewhat by gains in inventory building by businesses and a lower trade deficit.

Analysts viewed the first quarter slowdown as temporary, with consumers expected to boost their spending amid a low unemployment rate and the initial impact of the $ 1.5 trillion in tax cuts that Congress approved in December.

Over the past four quarters, GDP growth has averaged 2.9 percent, just below the 3 percent projection the Trump administration used in its budget for next year.

A separate report Friday found that U. S. private sector workers saw their wages go up 1 percent in the first quarter, the biggest quarterly gain in 11 years, a sign that the tight job market is beginning to lift wages.