US growth slowed to its lowest level in three years in the first quarter as consumer spending and government expenditures tumbled to their lowest levels in years, the Commerce Department reported Friday.
Preliminary data showed GDP increased only 0.7 percent in the first three months of the year, down sharply from the 2.1 percent expansion seen in the fourth quarter of 2016.
Though only slightly below the 0.8 percent increase in the same quarter of last year, the pace fell well below analyst expectations for 1.1 percent GDP growth.
It also marked a somber start to the presidency of Donald Trump, who hits his first 100 days in office Saturday (Shenzhen: 002291.SZ - news) and rose to power on a message of nationalist economic revival. Trump has taken credit for increased consumer confidence, growing employment and record gains on the stock market in recent months.
Trump also is basing planned multi-trillion-dollar tax cuts unveiled this week on an anticipated return to three percent annual growth, which the White House says will generate the revenues needed to pay for the tax cuts.
While economists debate the likelihood of a return to that level of growth, the first quarter numbers showed a tepid pace, although the preliminary growth estimates are subject to revision.
The report was replete with records.
Consumer spending fell to its lowest level in nearly eight years, adding only 0.3 percent, with spending on services their lowest in four years and durable goods orders their lowest since 2011.
Defense spending contracted by four percent, its lowest pace in nearly three years, helping drive down overall government expenditures by 1.7 percent, the lowest quarterly result in almost four years.
Business investments increased 4.3 percent for the quarter but this down from the brisk 9.4 percent in the prior quarter.
A recovery in oil prices helped sustain growth in this category, with mining, exploration, shafts and wells skyrocketing to 449 percent, an all-time record, up from 23.7 percent in the prior quarter.