January/March economic performance worst in 3 years, AP reports

In fact, the 0.7 percent annual growth rate for the period is far below the 2.5 percent pace in President Barack Obama's final three months in office, let alone Trump's 4 percent target.

United Kingdom gross domestic product (GDP) growth slumped to an estimated 0.3 per cent in the first quarter of 2017, the slowest rate in a year as higher prices took their toll.

While the GDP report may have been disappointing to some, the Employment Cost Index offered encouraging news. That stabilized somewhat in the first quarter, with goods exports rising 8.3 percent and goods imports up 4.5 percent.

The labor market now is close to full employment and the confidence of consumers is close to highs of multi-years, which suggests that the sharp slowdown mostly created by weather in spending by consumers is likely to be short-lived.

The economy surged in the final months of previous year, with a revised official estimate upgrading the GDP growth figure for the quarter to the end of December.

The White House has been promising a return to three percent economic growth, which it says will generate the revenue needed to pay for multi-trillion-dollar tax cuts unveiled this week. "We are getting all the right signals about investment, and in general people are feeling more confident". The latest report reflects the lowest numbers in about three years. Consumer spending, the biggest part of the economy, rose 0.3 percent, the worst performance since 2009.

There was some good news in the first quarter. Government spending dropped 1.7 percent in the quarter, negatively contributing 0.3 percentage points from real GDP growth. Two months ago, economists were predicting two percent growth.

The slow growth appeared to be mostly due to the fact that consumer purchasing was way down for the quarter, possibly related to the particularly warm weather, allowing consumers to spend less on heating for their homes.

The 0.3 percent growth in household consumption, which accounts for about 70 percent of the economy, followed a 3.5 percent jump from October to December. Economists polled by Reuters had forecast GDP rising at a 1.2 per cent pace last quarter. And it offset other positive developments, including a pickup in business investment and a rise in USA exports. But that was a significant slowdown from the brisk 9.4 percent in the prior quarter. The silver lining is that better spending on inventories in the second quarter should help to propel a rebound in growth.

"What Trump has delivered has been more bark than bite", said Jorge Mariscal, emerging markets chief investment officer at UBS Wealth Management. Even so, the weakness at auto dealers could weigh on expansion, and further gains in business investment could depend on the extent of policy support such as tax cuts.

Commerce Secretary Wilbur Ross said the report showed that the economy needed the tax cuts and regulatory reductions promised by Trump.