U.S. economic growth in the first quarter of 2019 has been revised down less than expected amid strong consumption and exports.
Inflation-adjusted gross domestic product (GDP) in the U.S. increased at a 3.1% annualized rate in the January-March period, compared with an initially reported 3.2%. Analyst had expected estimates for a revision down to 3%.
Consumer spending in the U.S., which accounts for most economic activity, grew 1.3% in the first quarter, topping projections for an unrevised 1.2% -- although that is still the slowest level of consumer spending in over a year.
The latest economic data may alleviate investor concerns that the U.S. economy is losing momentum. At the same time, recent reports suggest a dimmer outlook in the current second quarter, along with the intensifying trade war between the U.S. and China.
Excluding the trade and inventories components that gave a boost to GDP, final sales to domestic purchasers increased at a 1.5% rate -- the slowest since 2015, though revised from 1.4%. This measure, often looked to by economists as a gauge of underlying demand, suggests growth in the quarter was weaker than the headline number indicates.
In addition, the report gave the first read on business earnings for 2019, suggesting corporate America is facing headwinds from the trade war and the fact that the effects of a Republican tax cut are now waning. Pre-tax corporate profits fell 2.8% from the previous quarter, the biggest drop since 2015.