Please ensure Javascript is enabled for purposes of website accessibility
Economy Grew at Solid 3.1% Rate in Q1; Slowdown Expected
gvw_ap_news
By Associated Press
Published 6 years ago on
May 30, 2019

Share

WASHINGTON — The U.S. economy grew at a solid 3.1% rate in the first three months of the year, but much of that gain was based on temporary factors that will likely fade, leaving growth much slower in the current quarter.

The Commerce Department said Thursday that the first quarter advance in the gross domestic product, the economy’s total output of goods and services, rose sharply from a 2.2% increase in the fourth quarter as the economy overcame a partial government shutdown to weakness in overseas economies.

The new GDP estimate was down slightly from an initial 3.2% estimate. For the current April-June quarter economists believe GDP growth will slow to less than 2% and for the year they see GDP rising a modest 2.3%.

That forecast is far below the expectations of the Trump administration, which is projecting annual GDP gains averaging 3% over the next decade, gains that would be well above the 2.2% average GDP growth seen during the current 10-year expansion, which will become the longest in U.S. history in July.

Last year, the economy grew 2.9%, the best showing since a similar gain in 2015, but analysts believe much of that increase stemmed from the boost provided by the $1.5 trillion tax cut package passed in 2017, support they are forecasting will fade this year.

Two Factors Boosted First Quarter Growth

Some economists worry that the economy could falter even more than if trade tensions between the United States and China are not resolved. The move by the United States on May 5 to boost tariffs from 10% to 25% on $250 billion in Chinese goods after talks broke down has sent shockwaves through financial markets, with stocks down sharply this month as investors worry that a widening trade war will harm the U.S. and global economies.

“If the trade war escalates and the president follows through on his threat to raise tariffs on all Chinese imports … the risks of a recession will become very high.” — Mark Zandi, chief economist at Moody’s Analytics

Mark Zandi, chief economist at Moody’s Analytics, said he believes GDP growth will slow to 2.3% this year but that forecast is based on a truce in the coming weeks in the trade spat between the world’s two biggest economies.

“If the trade war escalates and the president follows through on his threat to raise tariffs on all Chinese imports, GDP growth will fall below 2% this year and unemployment will start to rise,” Zandi said. “The risks of a recession will become very high.”

The reason analysts believe growth will be much slower this quarter is that two factors that boosted first quarter growth — a big jump in stockpiling by businesses and a sharp contraction in the trade deficit — are not expected to last.

Even with the small downward revision, the 3.1% increase was the strongest first quarter gain since a 3.3% rise in 2015.

According to the small revisions in the new report, inventory growth and the shrinking trade deficit added slightly less support than initially reported. But consumer spending, which accounts for two-thirds of economic activity, showed more strength, growing at a 1.3% rate, still a slowdown from a 2.5% gain in the fourth quarter, but better than the 1.2% gain initially reported.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Fresno Unified Trustee Wittrup Says District Had Stronger Candidates Than Misty Her

DON'T MISS

Trump Poised to Offer Saudi Arabia Over $100 Billion Arms Package, Sources Say

DON'T MISS

Lights, Camera, Board Vote: Fresno Unified’s Carefully Choreographed Production

DON'T MISS

US Farm Agency Withdraws Proposal Aimed at Lowering Salmonella Risks in Poultry

DON'T MISS

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

DON'T MISS

Candi Is the Dandy to Add a Little Sweetness to Your Life

DON'T MISS

How Trump Tariffs Could Upend California Farms, Wine Businesses, and Ports

DON'T MISS

Tulare Man Sentenced to State Prison for DUI Crash That Injured Two Women

DON'T MISS

Judge Partly Blocks Trump Order Seeking to Overhaul US Elections

DON'T MISS

Two From Search Group That Uncovered Mexico’s ‘Ranch of Horror’ Killed

UP NEXT

Long Wait Is Over for Cam Ward, Travis Hunter and Other Draft Prospects Joining the NFL

UP NEXT

Golden State’s Jimmy Butler Injured in Game 2 Loss, His Status for Game 3 Unknown

UP NEXT

Jalen Green Makes Eight 3s to Help Rockets Even Series With Warriors

UP NEXT

US Justice Department Directs Investigations Over Gender-Affirming Care

UP NEXT

US Justice Department Cancels Hundreds of Grants for Police, Crime Victims

UP NEXT

Yelich’s 5th Career Slam and Bauers’ 2-Run Homer Power the Brewers to Win Over the Giants

UP NEXT

Happ Hits Game-Ending Single in the 10th as the Cubs Rally Past Dodgers

UP NEXT

Trump: No Plans to Fire Fed Chair Powell, but Wants Lower Rates

UP NEXT

Top Producer at ’60 Minutes’ Quits Amid Trump Lawsuit Pressure

UP NEXT

Israeli Strikes Kill 17 in Gaza and Destroy Heavy Equipment Needed to Clear Rubble

US Farm Agency Withdraws Proposal Aimed at Lowering Salmonella Risks in Poultry

2 hours ago

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

2 hours ago

Candi Is the Dandy to Add a Little Sweetness to Your Life

3 hours ago

How Trump Tariffs Could Upend California Farms, Wine Businesses, and Ports

3 hours ago

Tulare Man Sentenced to State Prison for DUI Crash That Injured Two Women

4 hours ago

Judge Partly Blocks Trump Order Seeking to Overhaul US Elections

4 hours ago

Two From Search Group That Uncovered Mexico’s ‘Ranch of Horror’ Killed

5 hours ago

US Warns States They Could Lose Transportation Funding Over Immigration, DEI Policies

5 hours ago

Don’t Miss Out! Tower District’s Porchfest Festival Is Saturday

5 hours ago

Shooter in 2022 Chicago-Area Parade Massacre Sentenced to Life in Prison

5 hours ago

Fresno Unified Trustee Wittrup Says District Had Stronger Candidates Than Misty Her

Fresno Unified Trustee Susan Wittrup says the district had an opportunity to select an experienced superintendent with a track record of suc...

21 minutes ago

21 minutes ago

Fresno Unified Trustee Wittrup Says District Had Stronger Candidates Than Misty Her

President Donald Trump delivers remarks during an 'Unleashing American Energy' event at the Department of Energy in Washington, U.S., June 29, 2017. (REUTERS File)
1 hour ago

Trump Poised to Offer Saudi Arabia Over $100 Billion Arms Package, Sources Say

2 hours ago

Lights, Camera, Board Vote: Fresno Unified’s Carefully Choreographed Production

Chickens sit at a poultry farm. March 12, 2025. (REUTERS/Diego Vara/File Photo)
2 hours ago

US Farm Agency Withdraws Proposal Aimed at Lowering Salmonella Risks in Poultry

2 hours ago

On Major Economic Decisions, Trump Blinks, and Then Blinks Again

Candi, GV Wire's Adoptable Cat of the Week
3 hours ago

Candi Is the Dandy to Add a Little Sweetness to Your Life

3 hours ago

How Trump Tariffs Could Upend California Farms, Wine Businesses, and Ports

Maxwell Barrios, 28, of Tulare, was sentenced to over four years in state prison on Wednesday, April 23, 2025, for a 2023 DUI crash that seriously injured two women, including one who required a partial arm amputation. (Tulare County DA)
4 hours ago

Tulare Man Sentenced to State Prison for DUI Crash That Injured Two Women

Help continue the work that gets you the news that matters most.

Search

Send this to a friend