US consumer spending flat for second month in March
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WASHINGTON — U.S. consumers cut back sharply on buying durable goods such as autos in March, leaving overall spending unchanged for a second straight month. A slowdown by consumers was a major reason overall economic growth slowed so sharply over the winter.
Consumer spending was unchanged in March after also being flat in February and posting only a modest rise of 0.2 per cent in January, the Commerce Department reported Monday. For the January-March quarter, the sharp slowdown in consumer spending was a key reason growth, as measured by the gross domestic product, slowed to an annual rate of just 0.7 per cent, the poorest performance in three years.
Economists believe growth will bounce back in the current April-June period, helped by continued strong job gains, rising wages and increased consumer confidence. Many analysts are looking for a second quarter surge to growth of 3 per cent or better and they are forecasting growth for the entire year of around 2.3 per cent, up from 1.6 per cent GDP growth in 2016, the poorest showing in five years.
Analysts believe the bounce back in the current quarter will be helped by job gains, rising wages and increased consumer confidence. But the poor first-quarter performance underscored the challenge President Donald Trump faces in lifting economic growth, which has lagged over the nearly eight years of this economic expansion, the slowest in the post-war period.
