By Kevin Lessmiller, Courthouse News
(CN) – The U.S. economy beat expectations and grew at a 3.2% rate in the first three months of the year, fueled by a lower trade deficit and a boost in consumer spending.
The growth in the gross domestic product, a primary indicator of economic health, is up significantly from 2.2% in the final quarter of 2018, the Commerce Department reported Friday. Economists had predicted a GDP gain of about 2% in the first quarter of 2019.
The surprising uptick marks the first time since 2015 that first-quarter GDP growth has topped 3%.
The Commerce Department reported last week that the U.S. trade deficit fell 3.4% percent to $49.4 billion in February, the lowest level in eight months. Retail sales also jumped 1.6% in March, spurred by increased spending on cars, gas, clothing and furniture.
The stock market also rebounded after the Federal Reserve signaled in January that it will not raise its key interest rate this year. Fed Chairman Jerome Powell has said the central bank can be “patient” this year while inflation pressures are being kept in check.
The economy will mark 10 years of growth in July, the longest streak on record.
But economists don’t expect GDP growth to stay quite as strong in the second quarter of the year. The trade deficit in particular is volatile factor and is expected to widen in the coming months.
Many predict GDP growth will slow to about 2% in the April-June quarter. Economists expect yearly growth of 2.4% in 2019, down from 2.9% last year.