Photo: Carlos Barria / Reuters
US GDP in the first quarter under President trump rose only 0.7% — the worst performance in three years. The reason is the American consumer, who has reduced a major purchase, statistics
The American economy in the first quarter of 2017 rose 0.7% on the previous quarter, announced the government’s Bureau of economic analysis of the United States in its first estimate of GDP of the three. This is the weakest growth since the beginning of 2014, follows from the statistics Department. Economists polled by Reuters and The Wall Street Journal had expected growth in 1-1,2%.
American statistical service publishes estimates of GDP in terms of annual growth, adjusted for seasonality (seasonally adjusted annual rate, SAAR). This means that the actual GDP growth in the first quarter amounted to only about 0.2%.
The main reason for weak growth — deceleration in consumer spending: they grew by only 0.3% in terms of annual pace, this slow growth not seen since the end of 2009. In the composition of consumer spending, purchases of durable goods such as cars, washing machines or refrigerators, and it decreased by 2.5%. Played the role of the warm winter this year, which reduced the thermal energy consumption, notes the WSJ.
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The US economy historically grows slower in the first couple of quarters than in the later: over the past 30 years the average growth in January–March was 1.87%, compared with an average annual growth of 2.7%, reported CNBC in 2015, citing its own analysis. Data for the first quarter of 2017 may underestimate the dynamics of the American economy, given that the labour market close to full employment, indexes of consumer confidence are at multi-year highs, and the stock market is steadily growing.
However, even if we consider that the economy will accelerate in the following quarters, the US President Donald Trump would be difficult to keep his promise and to accelerate annual GDP growth to 4%, says Reuters.