US GDP posts 3.2 percent growth in first quarter, outlook remains gloomy

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US GDP posts 3.2 percent growth in first quarter, outlook remains gloomy

On Friday, the 26th of April 2019, US Commerce Department data had revealed an upbeat painting of US economy, as its gross domestic product had surged by 3.2 percent over the first quarter of 2019, wildly beating analysts’ forecast of 2.3 percent, although the underlying strength of US economy seemed to be vulnerable, since the economic acceleration generated during the Q1, 2019, was largely driven by a smaller trade deficit because of a flurry of tit-for-tat retaliatory tariff battle across the world and a record accumulation of unsold goods since 2015.

Despite a strong growth, appeared to be a breakthrough development, analysts had been quoted saying following the release of the data that the latest growth in US GDP was momentary and it would likely to reverse over the upcoming quarters.

Nonetheless, an upsurge in the economic growth reported by US Commerce Department had broadly eased nerve-wracking worries of an imminent recession, while there had been a slight inversion of US Treasury yield curve in March.

However, Friday’s (April 26th) data had also witnessed a havoc-scale plunge in the consumer and business spending, and homebuilding investments were curbed for fifth straight quarter in a row despite a low mortgage rate.

Despite all the concerns over US economy’s momentary growth and a stockpile of unsold goods amid tariff wars on multiple fronts, which would likely to weigh on US businesses during the later part of the year, US President tweeted following the reveal of the data, “This is far above expectations or projections,” while a chief economist at RSM in New York, Joe Brusuelas had been quoted saying that the data had been pointing towards a slowing trend and the Federal Reserve would now be more jawboned over their prudent pause on a rancorous rate hiking cycle.