Figures released Thursday showed the world's largest economy slowed more than previously estimated in the first quarter, amid the weakest performance in consumer spending in nearly five years. But the numbers also say growth appears to have since regained momentum on the back of a robust labour market and tax cuts.
The U.S. Commerce Department reported that gross domestic product increased at a 2% annual rate in the January-March period. It was the third estimate of first-quarter GDP, stepping back from the 2.2% pace the department reported last month.
The economy grew at a 2.9% rate in the fourth quarter. The downgrade to first-quarter growth reflected weaker consumer spending and a smaller inventory accumulation than the government had estimated last month.
A $1.5-trillion income tax cut package, which came into effect in January, is seen spurring faster economic growth in the second quarter, putting annual GDP growth on track to achieve the Trump administration's 3% target.
Economists, however, warn that the administration's "America First" policies, which have heightened fears of trade wars, are casting a pall over the economy's prospects.
The United States is engaged in tit-for-tat trade tariffs with its major trade partners, including China, Canada, Mexico and the European Union, which analysts fear could disrupt supply chains and undercut business investment and potentially wipe out the fiscal stimulus.
