Home / BBC News / US economy slows sharply in the first quarter

US economy slows sharply in the first quarter

Tesla factory, Freemont CaliforniaImage copyright Reuters

The US economy slowed dramatically in the first three months of the year, according to official data.

GDP expanded at an annual rate of 0.7% in the first quarter, which was a sharp slowdown from the 2.1% growth rate in the final three months of 2016.

It was also the lowest rate of growth since the first quarter of 2014, when the economy contracted by 1.2%.

The Bureau of Economic Analysis blamed lower levels of government spending and private investment.

In recent years GDP growth has often been sluggish in the first quarter, but has picked up later in the year.

Many economists blame that trend on the way the data is collected.

“US GDP figures are typically weaker in the first quarter, so this reading is in line with the seasonal trend,” said Nancy Curtin, chief investment officer at Close Brothers Asset Management.

“We haven’t yet had the expected fiscal stimulus from Trump, the effects of which may not be seen until the end of this year or the start of 2018.”

She also pointed out that other data suggested strength in the US economy .

“While investors might be disappointed with the reading, it has been a steady start to the year with inflation looking benign, a resilient jobs market and positive PMI [purchasing managers’] data.”

Check Also

Kabul: Gunmen attack Intercontinental Hotel

Image copyright Reuters Image caption Afghan security forces have taken up positions around the hotel …

Syria: Turkey war planes launch strikes on Afrin

Image copyright AFP Image caption Turkish war planes hit Kurdish positions on the Syrian side …

Lac-Megantic trial: Workers cleared over Canada rail disaster

A Canadian jury has found three former rail workers not guilty of criminal negligence for …

Kenya investigates ‘sex attacks’ on new mothers at hospital

Share on Facebook Tweet on Twitter Kenya’s health minister has ordered an investigation into claims …

US shutdown begins as Senate fails to pass new budget

Media playback is unsupported on your device Media captionGovernment workers on what happens during a …