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Uh Oh, First Quarter GDP Is Very Weak

WASHINGTON, DC--One interpretation suggests that the Fed will still continue to raise rates as this is likely just a brief period of sluggish growth.

By Erika Morphy | erikamorphy | Updated on April 28, 2017

Commerce Department. Photo by GSA Commerce Department. Photo by GSA

WASHINGTON, DC–The Commerce Department released disappointing first quarter GDP figures this morning: The US economy posted an anemic growth rate of 0.7%, the weakest since the first quarter of 2014 and a sharp decline from the 2.1% recorded in Q4 of 2016.

Analysts say weak consumer spending (which registered 0.3%, below the 3.5% rate in the previous quarter) and cuts in defense spending were some of the reasons behind the slower-than-expected growth — the rate was lower than the 0.9% Wall Street had been expecting, even after multiple downward revisions throughout the first quarter, according to First Franklin Financial Services.

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