US economic growth in the first quarter of 2018 slowed to 2.0%

KONTAN.CO.ID – WASHINGTON . The US economy (US) during the first quarter of this year, the final version, has progressed more slowly than expected. The slowdown in economic growth comes as consumer spending reaches the lowest point in five years.

However, a strong labor market as well as tax reduction policies should still support the US economy.

The Commerce Department released Thursday a final figure of 2% US gross domestic product (GDP) from one year to the next (year – on – year) from January to March 2018. lower than pre-eliminatory GDP which was 2.2% year-on-year.

US economic growth in the first quarter was also lower than the fourth quarter of last year, which reached 2.9% year-on-year. This decline reflects a decline in consumer spending and inventories lower than the government's forecast last month.

Quote from Reuters Consumer spending accounts for more than two-thirds of US economic activity. Unfortunately, growth stagnated at 0.9% year-on-year, less than previously announced growth of 1% yoy. In fact, consumer spending in the United States grew 4% in the fourth quarter of last year.

This is the lowest rate of growth in consumer spending in the United States since the second quarter of 2013. However, it is hoped that consumer spending in the second quarter will improve as that the labor market will strengthen.

On the other hand, economists also warn that the policy " American First " that sparked a trade war over the years, contributed to the uncertainty of the US economic outlook .

Economists and badysts fear that US tariff disputes with China, Canada, Mexico and the EU will disrupt the supply chain, hurt business investment and potentially eliminate fiscal stimulus measures.

"Trade is a significant downside (economic) risk," said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh, quoted by Reuters on Friday (29/6). "The potential for a trade war that threatens the expansion of the global economy could lead to lower economic growth in the United States," he continued.

UNITED STATES / AS