The US economy turned in the weakest performance in three years in the January-March quarter as consumers sharply slowed their spending, the AP reports. The result repeats a pattern that has characterized the recovery: lackluster beginnings to the year. The gross domestic product, the total output of goods and services, grew by just 0.7% in the first quarter following a gain of 2.1% in the fourth quarter, the Commerce Department reported Friday. The slowdown primarily reflected slower consumer spending, which grew by just 0.3% after a 3.5% gain in the fourth quarter—the poorest showing in more than seven years. Analysts blame in part the unusually warm winter, which meant less spending on utility bills. Economists believe the slowdown will be temporary and forecast GDP growth will rebound to 3% or better in the current quarter.
Averaging the two quarters, they forecast growth of about 2% for the first half of 2017. That would be in line with the mediocre performance of the eight-year economic expansion, when growth has averaged just 2.1%, the poorest showing for any recovery in the post-WWII period. President Trump repeatedly attacked the weak GDP rates during the campaign as an example of Obama's failed economic policies and has said his program of tax cuts for individuals and businesses, deregulation, and being tougher on trade would double growth to 4% or better. Treasury Secretary Steven Mnuchin said Wednesday he believed growth above 3% is achievable, though private economists are dubious. Many analysts believe the impact of Trump's economic program won't be emerge until 2018. (More US economy stories.)
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