WASHINGTON—The U.S. economy grew 2.3% in the first quarter, according to the Commerce Department's latest initial estimate.
"Consumer spending growth decelerated following last year's robust holiday shopping season, causing a slowdown in [gross domestic product] growth," said NAFCU Research Assistant Yun Cohen, who analyzed the data.
The fourth quarter saw growth of 2.9%.
"However," she added, "real disposable income rose by the fastest rate in three years as a result of the recent tax cuts, which bodes well for future spending growth."
Despite the deceleration in the first quarter, growth was widespread among the major segments. Contributions to growth of real GDP came from gains in nonresidential investment (+0.76 percentage points), personal consumption expenditures (+0.73%), change in inventories (+0.43%), net exports (+0.2%) and government spending (+0.2%). Residential investment was flat during the quarter despite an uptick in new construction.
Personal consumption expenditure (PCE) inflation, the Fed’s preferred inflation metric, remained at 2.7% in the first quarter.
Core PCE inflation (excluding food and energy) increased from 1.9% in the fourth quarter to 2.5% in the first quarter. "Core PCE inflation advanced by the fastest pace since 2011, another sign that price gains are starting to pick up," Cohen added.