Economic growth in the United States increased past expectations in the first quarter of 2019, easing many fears of an impending slowdown that kicked off the year.
U.S. gross domestic product (GDP) grew at an annual rate of 3.2 percent in the first quarter of 2019. This is according to an initial estimate of growth released Friday by the Commerce Department.
Economists had predicted U.S. GDP to grow roughly 2.5 percent between the first quarters of 2018 and 2019. This is usually one of the weaker periods for the American economy. Shaky financial markets, lagging retail sales and weak job gains all gained over the course of the first four months of 2019. This brought improvement for the overall economic outlook along the way.
Increases in consumer spending, private inventory investment, nonresidential fixed investment, exports and nonfederal government spending served to drive strong first quarter growth, the Commerce Department said.
The second estimate for first-quarter growth, based on a fuller set of data, will be released on May 30.
The surprisingly high first quarter growth rate is the latest sign of strength for the U.S. economy. It is now well into its tenth year of expansion since the Great Recession. The economy grew at a solid 2.9-percent rate in 2018. Slowing growth and severe financial market turmoil at the of end the year raised concerns of an impending slowdown.
Despite a sluggish start to 2019, the U.S. economy has added an average 180,000 jobs per month this year while the stock market has reached record highs.
The growth of the economy is welcome news for President Trump, who is hoping for consistent growth and low unemployment to survive a difficult reelection bid in 2020.
The U.S. economy still faces several threats in between now and the election. The mounting costs of Trump’s trade battles, fading fiscal stimulus from 2017 tax cuts and spending increases, and the uncertain future of the North American Free Trade Agreement all will cause risks to economic growth.