U.S. economic growth accelerated in the first quarter, but the burst in growth w...
WASHINGTON - U.S. economic growth accelerated in the first quarter, but the burst in growth was driven by a smaller trade deficit and the largest accumulation of unsold merchandise since 2015, temporary factors that are likely to reverse in the coming quarters.
But consumer and business spending slowed sharply, and investment in homebuilding contracted for a fifth straight quarter, giving the report a weak tone. Fed officials are likely to shrug off the surge in growth last quarter and focus on a measure of domestic demand that increased at only a 1.3 percent rate, the slowest since the second quarter of 2013. It increased at a 2.6 percent pace in the October-December quarter.
The standoff has also had an impact on inventories, which increased at a $128.4 billion rate in the first quarter, the strongest pace since the second quarter of 2015. Inventories increased at a $96.8 billion pace in the October-December quarter. Part of the inventory build was because of weak demand, especially in the automotive sector, which is expected to weigh on future production at factories.
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