Latest GDP shows that the U.S. economy stalls in the first quarter of 2017 with slowest growth in 3 years. The gross domestic product increased at a meager 0.7% annual pace in the first three months of the year. The slow down reflected the weakness in consumer spending that is likely to rebound in the coming months.
Consumer spending rose by only 0.3 percent, a steep drop from the 3.5 percent rate in the previous quarter. MarketWatch reported: “The pullback in consumer spending is unlikely to last, though. Americans spent less on gasoline, home-heating fuel and clothes after a spell of unseasonably warm weather in February—the second hottest on record. That is unlikely to be repeated in the spring. More important, household finances are in the best shape in years amid record stock market gains, a strong labor market and gradually rising wages. Americans have more money to spend and that is reflected by rising home sales.”
Personal saving was $814.2 billion in the first quarter, compared with $778.9 billion in the fourth. The personal saving rate — personal saving as a percentage of disposable personal income — was 5.7 percent in the first quarter, compared with 5.5 percent in the fourth.