By Isaac Cohen*
The fact that the US economy, according to the Commerce Department, grew at an annual rate of 2.3 percent from January to March indicates that there was a slowdown, when compared to the annual rate of 2.9 percent achieved during last year’s fourth quarter.
Consumer spending, which amounts to more than two thirds of the economy, slowed down to 1.1 percent during this year’s first quarter, after reaching 4 percent during the holiday season, between October and December 2017. By contrast, business spending increased vigorously, between last January and March. For instance, nonresidential fixed investment, in buildings and equipment, expanded at a rate of over 6 percent. This may be an indication that the tax cuts approved last year are already benefitting businesses, while consumers have yet to see them reflected in their pay checks.
However, other indicators support the expectation that growth will pick up during the rest of this year. For example, the number of persons requesting unemployment benefits fell, last week, to the lowest level in almost 50 years. Additionally, this month, the US economic expansion will become the second longest registered. Finally, on April 30, the Federal Reserve Bank of Atlanta estimated growth in the second quarter of this year will reach 4.1 percent.
*International analyst and consultant, former Director ECLAC Washington Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
