U.S. Economic Growth Slows to 2.3%

Growth in U.S. real gross domestic product slowed to an annualized 2.3% in the first quarter, according to a first estimate by the Dept. of Commerce.

The rate compares with 3.2% and 2.9% in last year’s third and fourth quarters, respectively. The department’s Bureau of Economic Analysis will release more specific calculations for first-quarter data over the next three months.

BEA says GDP growth in January-March was hampered by quarter-to-quarter declines in personal spending, exports, residential fixed investment and spending by state and local governments.

The bureau notes that its price index, excluding volatile energy and food prices, increased 2.5% in the first quarter compared with 1.9% in October-December. Personal spending, which accounts for two-thirds of U.S. economic activity, slowed to 1.1% in the first quarter from 4% in last year’s fourth period.

The Federal Reserve said earlier that it expected a “transitory” first-quarter downturn. Analysts predict growth in GDP will accelerate in the second quarter as the Trump administration’s $1.5 trillion income tax cuts take hold.