The US economy grew by 3.1% to the beginning of the year, slightly better than expected, and provides some relief at a time when the recession decline is on the rise, the Trade Department said on Thursday.
First-quarter gross domestic product hit 3% Dow Jones estimates but was lower than the initial 3.2% projection from the Bureau of Economic Analysis. The decline came due to downward revisions of non-residential fixed and private stock investment, two key drivers of GDP.
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The new figures, which represent the second reading, also reflect upward revisions of exports and personal spending. Corporate earnings also weakened, fell 2.8% in all companies and 0.5% in S&P 500.
Inflation indicators were also weaker than expected, while core spending on personal consumption increased by only 1[ads1].03%.
Exports increased by 4.8% increasingly bitter trade war between the US and China, while imports, which is a subtraction from GDP, fell 2.5%. The level of net exports contributed almost 1 percentage point to the GDP gain.
In the larger picture, growth surpassed easily what most economists had expected at the beginning of the year. At one point, the Federal Reserve in Atlanta estimated the GDP to rise only 0.2%. Strong contributions from real gross income helped drive the better figures, and increased exports, government and local government and fixed investments.
The corporate result fell in the quarter, while non-financial corporations saw a $ 62.1 billion decline compared to a $ 13.6 billion increase in the fourth quarter. Financials increased by $ 7.2 billion compared to a $ 25.2 billion decline in the previous period.
Expenditure on personal consumption rose 1.3% in the quarter compared to an increase of 2.5% in the quarter, but well above 0.5% in Q1 of 2018.
Second quarter growth is expected to decline significantly. The CNBC's finance economy survey looks at GDP up 1.8%, while Atlanta Fed's projection is just 1.3%.