The U.S. economy is beating expectations and the latest figures from the Bureau of Economic Analysis (BEA) seem to confirm this.
Real Gross Domestic Product (GDP) increased 3.2 percent in the first quarter of this year, reported the BEA on Friday, April 26. This is an advance figure, with final figures to be issued in May.
Underscoring the strength of the economy, the 3.2 percent figure would likely have been higher without the partial government shutdown early this year.
Each of the following segments of the economy contributed to the increase in the first quarter: consumer spending, inventory investment, exports, government spending, and business investment (partly offset by a decrease in housing investment). Imports decreased, which helps to boost GDP.
The president’s Council of Economic Advisors (CEA) said in a press release, “The strong economic performance in 2017 and 2018 was not merely a continuation of trends already under way during the preceding post-recession expansion, but rather constituted a distinct break from trend and positive surprise relative to expectations.”
The GDP has expanded faster than projections. The CEA cited forecasts from the Congressional Budget Office and Federal Open Market Project made before the Nov. 2016 election.
The two bodies estimated 2017 growth at 2.2 percent, when it actually grew at 2.5 percent; for 2018 they estimated a 2.0 increase, with actual increase of 3.0 percent; and for 2019 they estimated growth will be 1.7 percent, which contrasts with the just-reported annualized figure of 3.2 percent for the first quarter.
In a tweet Friday morning, President Donald Trump said, “This is far above expectations or projections. Importantly, inflation VERY LOW.”
In remarks made to reporters before he left for the National Rifle Association conference in Indianapolis on Friday, the president added, “We’re the number 1 economy right now in the world, and it’s not even close.”