U.S. Economy Grew at 3.2% Rate in First Quarter - The New York Times

Rumors of the economic expansion’s death appear to have been greatly exaggerated.

Gross domestic product, the broadest measure of goods and services produced in the economy, rose at a 3.2 percent annual rate in the first three months of the year, the Commerce Department said Friday. (Friday’s figures are preliminary and will be revised at least twice in the months ahead.)

Most economists expect a downshift as the year progresses. Hardly any independent economists expect that President Trump will be able to deliver the 3 percent growth he has promised this year.

Still, after a rough winter, the economy appears to have entered the spring fundamentally intact. Stock-market turmoil, a partial government shutdown and a crippling “polar vortex” failed to bring the decade-long recovery to an end. And with the job market still strong and consumers confident, fears of a recession appear to have been set aside.

“The angst has settled, and the economy has come back,” said Ben Herzon, an economist with Macroeconomic Advisers, a forecasting firm. “I just can’t point to anything now that’s going to push us into recession.”

Consumers bounced back

Consumer spending has been the bedrock of the recovery, staying strong even as other sectors have ebbed and flowed. So economists were nervous when spending tumbled unexpectedly in December and failed to rebound in January.

Since then, things have looked better. Consumer confidence, which fell sharply in December and January, quickly recovered once the shutdown ended and financial markets stabilized. Retail sales bounced back strongly in March.

“We did see strengthening throughout the quarter with momentum building,” said Ellen Zentner, chief United States economist for Morgan Stanley. “We’ve got nice consumer spending momentum going into the second quarter.”

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