U.S. economy surges 3.2 percent in first quarter

Credit: Reuters - Business (Amazon FireT
Published on April 26, 2019 - Duration: 01:26s

U.S. economy surges 3.2 percent in first quarter

The U.S. economy accelerated in the first three months of the year, fueled by a rebound in local and state government spending, as well as temporary factories tied to trade.

Conway G.

Gittens reports.

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U.S. economy surges 3.2 percent in first quarter

The U.S. economy stepped on the gas pedal in the first quarter of the year.

Data released Friday showed the U.S. economy grew at a 3.2 percent annual rate in the first three months of 2019, which was faster than expected.

Pretty impressive if you remember what the economy had to grapple with at the start of the year: the tail end of a partial government shutdown, a weather phenomenon known as the polar vortex, and a lot of angst in financial markets.

SOUNDBITE: REUTERS BUSINESS CORRESPONDENT CONWAY G.

GITTENS (ENGLISH) SAYING: I'm Conway Gittens in New York.

While this pick-up in economic growth is certainly nothing to frown at, there are some things to note that takes some of the bloom off the rose.

The most powerful component of the economy is consumer spending and that slowed down in the first quarter by more than half the rate seen the prior quarter.

Business spending on equipment was almost zero.

It posted the weakest reading in more than two years.

So that left the economy to rely on temporary factors like a swing in exports as manufacturers tried to beat the clock on another possible round of tariffs.

The economy also saw a boost from a rebound in state and local government spending.

That's enough juice to keep the economy on track for the longest expansion on record.

The latest numbers are not likely to shake the Federal Reserve, which has already said interest rate hikes are on pause for the rest of the year.

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