The U.S. economy grew at a 3.2% annualized rate in the first quarter of the year — a faster pace than the previous quarter's 2.2% and significantly more than the 2.1% economists were expecting, the Commerce Department said on Friday, thanks to strong exports and consumer spending.
Why it matters: Concerns about a U.S. economic slowdown have subsided, given the bounce back in recent economic indicators. This blowout GDP report — though subject to revision — shows that the economic cycle might have more room to run, putting the Federal Reserve, which has backed off on raising rates, in a tough spot.
What to watch: Economists say the underlying data points that fueled growth in the first quarter may fade later in the year.
Fab Q1 GDP print (3.2pc)...till you look under the hood and kick the tires. Inventory buildup will have to be unwound (which will drag on growth), imports were weak (everyone front ran the tariffs last year) and defence spending was strong (but rest of govt spending weak).
— Megan Greene (@economistmeg) April 26, 2019
Go deeper: Global economic whiplash
