WASHINGTON—The Commerce Department revised first quarter economic growth down slightly to 2% – the slowest growth in a year – in its recently released final estimate.
NAFCU Chief Economist and Vice President of Research Curt Long attributed the slowdown to lower consumer spending, "which decelerated sharply after last year's robust holiday shopping season."
"Nevertheless, the economy appears to be accelerating, and the Atlanta Fed's GDPNow forecast estimates growth of 4.5% for the second quarter, which would be the strongest quarter of growth since 2014," Long said in a NAFCU Macro Data Flash report. "Both corporate profits and real disposable income improved since the tax cuts came into effect in January, which bodes well for future growth. However, uncertainty about trade policies poses a downside risk."
The department's Bureau of Economic Analysis previous estimate had the economy's growth at 2.2%; the fourth quarter saw 2.9% growth.
In addition to lower estimates for consumer spending, estimates for inventory accrual and net exports were also revised downward. Those negative adjustments were slightly offset by upward revisions to business investment, residential investment and government spending, Long said.