(CN) – The nation’s gross domestic product, the broadcast gauge of U.S. economic might, grew at a sluggish 1.2 percent rate in the first quarter of the year, far below President Donald Trump’s growth targets.
Friday’s report from the Commerce Department was an improvement over initial estimates for the January-March quarter, reflecting upticks in consumer spending, business investment and expenditures by state and local governments.
Paul Ashworth, chief U.S. economist at Capital Economics, told the Associated Press that Friday’s numbers confirm the economy got off to a “disappointing” start in 2017.
But he and other analysts continue to believe that GDP is in the process of rebounding in the current, April-June quarter, and that growth during the rest of the year will be robust thanks the lowest unemployment rate in a decade, solid hiring, and an anticipated increase in consumer spending.
“Growth is bouncing back in the second quarter,” Gus Faucher, chief economist at PNC, told the AP. “Consumer spending continues to expand with job and wage gains, and business investment is picking up, especially for energy-related industries.”
During the presidential campaign, Trump frequently complained of the economy’s weak growth, blaming it on what he called the Obama administration’s failed policies.
He had vowed that his program of tax cuts, deregulation and tougher enforcement of trade agreements would double growth to 4 percent or better.
But the 2018 budget proposal he rolled out this week foresaw a smaller, 3 percent rate of economic expansion, and analyst say that rate, which hasn’t been reached on a sustained basis in more than two decades, is also unlikely.
For instance Friday’s upward revision of the GDP for the first quarter reflects consumer spending rising to an annual rate of 0.6 percent – but that was still the slowest in seven years.