US growth hits three-year low

The US economy slowed dramatically in the first quarter of 2017, with GDP weakening andexpanding by only 0.7 percent, down sharply from the 2.1 percent expansion seen in the fourth quarter of 2016.

The American Commerce Department reported Friday that the results were below analysts' expectations for 1.1 percent GDP growth, although the figure was only slightly below the 0.8 percent increase in the same quarter of last year.

The results mark a damp start to the presidency of Donald Trump, who reaches 100 days in office Saturday and was elected on a message of a protectionist economic revival. Trump has taken credit for increased consumer confidence, growing employment and record gains on the stock market in recent months.

Temporary lull

However, slow consumer spending, which had fallen to its lowest level in nearly eight years, and downturns in business inventory investment and spending by state and local governments were key factors in the weak quarter.

Economists expect the slowdown to be temporary, with GDP forecast to rebound to 3 percent or better in the current quarter, in line with annual growth predicted to rise by 2 percent.

Despite the gloomy growth figures, job growth was strong in January and February before slowing in March, and the unemployment rate is at a nearly decade-low of 4.5 percent.

Business investment also rose at a 9.4 percent rate, helped by a strong surge in spending in the energy sector. It had seen sharp cutbacks in recent quarters, reflecting reductions in exploration and drilling as energy prices declined.

mds/hg (AP, AFP)