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U.S. GDP growth in Q1 remains unchanged 3.1 percent after revision

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Christian Fernsby ▼ | June 28, 2019
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America   The department's third and final estimate compared to a 2.2 percent expansi

Growth of U.S. gross domestic production (GDP) in the first quarter remained unchanged at 3.1 percent after revision, the U.S. Department of Commerce said as it released the final data Thursday.

The department's third and final estimate compared to a 2.2 percent expansion in the fourth quarter of 2018, the data showed.

With regard to specific indicators, investments, exports and government spending were revised higher than previously estimated, while personal consumption was weaker after adjustment.

The Republican Party-proposed 1.5-trillion-dollar tax cut - the effect of which is widely expected to wane this year boosted GDP growth for full year 2018 to 2.9 percent, but that still undershot the Trump administration's 3 percent target.

The White House continues to tout an average annual GDP growth of above 3 percent in the years ahead.

However, economists see clear signs of a slowdown, with the International Monetary Fund predicting a 2.3 percent growth in 2019 for the United States in its World Economic Outlook released in April. The World Bank's estimate is 2.5 percent for the year.

President Donald Trump has repeatedly criticized Federal Reserve Chairman Jerome Powell for keeping the benchmark interest rate high, which he said hampered his administration's expansionist economic agenda.

The president complained as recently as Sunday that Powell raised the rates "too fast," adding the central bank chief hasn't done a good job and "made a mistake" by not loosening the monetary policy.

Powell, for his part, announced after the June 18-19 Federal Open Market Committee meeting that Fed officials decided to keep the federal funds rate steady in a range between 2.25 percent and 2.5 percent. Meanwhile, he said the Fed will "act as appropriate to sustain the expansion," which has been interpreted as indicating an open attitude toward rate cuts.

As relates to reports that Trump mulls demoting Powell, which the president himself denied during Sunday's interview with NBC, Powell said on June 19 that he fully intends to serve his four-year term. He reiterated in a speech in New York on Tuesday that the Fed is "insulated" from short-term political pressure.


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