US economy grew by 2.3% in the Q1
The US economy’s growth slowed year on year but still put in a creditable performance of 2.3 per cent for the first three months of 2018.
This is 0.3 per cent better than analysts anticipated. The growth for the period under review is slower than the average 3 per cent gain in the last three quarters.
So what accounted for this?
Consumers did not spend as much and took a cautious approach. This may be due to post holiday caution. Spending increased by just 1.1 per cent which was the smallest increase in half a decade.
This follows a 4% gain in the fourth quarter of 2017 that was the biggest in three years. There was a noticeable drop in the purchasing of new cars in the first quarter of this year.
The good news is exports increased 4.8 per cent with imports also rising but by just 2.6 per cent.
The Fed is expected to make four rate hikes this year which spells bad news for highly leveraged companies.
This 2.3 per cent GDP growth for the first quarter which translates to $17.4 trillion flowing into the U.S. economy.
This is the first recorded growth by the Commerce Department since President Trump’s tax cut took effect on January 1 which saw a reduction in corporate taxes.