The U.S. economy got off to a lackluster start during the first three months of 2017, though it enjoyed more momentum than earlier estimates indicated.
The Commerce Department said Thursday that gross domestic product (GDP), the broadest measure of economic health, grew at an annual rate of 1.4 percent in the first quarter — better than a previous estimate of 1.2 percent and double the initial estimate of 0.7 percent. The upgrade reflects newfound strength in consumer spending and exports.
The result is weaker than 2.1 percent growth in the fourth quarter and matches the growth rate recorded the second quarter of 2016. It is still well below President Donald Trump’s ambitious growth targets of the economy, growing at more than 3 percent.
Analysts expect growth to accelerate in the second quarter, fueled by solid hiring and an uptick in consumer spending. Estimates from the Atlanta Federal Reserve expect that the economy expanded at an annual pace of 2.9 percent during the April-June quarter.
During the first quarter of the year, consumer spending grew at a faster pace than earlier GDP estimates suggested. Spending on housing, health care and financial services, including insurance, rose much higher in the third estimate than the prior estimate. Consumer spending accounts for roughly 70 percent of all economic activity.
The exports of U.S. goods also improved more than previously reported, contributing to the slightly faster growth.