US first-quarter growth revised up sharply to 1.2pc

WASHINGTON: The US economy grew much faster than originally reported in the first quarter due to sharp increases in business and consumer spending, the Commerce Department reported Friday.

The revised data mean GDP growth in President Donald Trump's first quarter was 1.2 percent, half a percentage point higher than the first report, which had US economic expansion at its slowest pace in three years.

Businesses fixed investment rose at the fastest pace in five years, which helped put a far rosier on the January-March period.

Analysts had been expecting a revision of only a tenth of a point.

The result was still far slower than the final three months of 2016, when GDP grew 2.1 percent but analysts say first quarters have trended low in recent years.

Having risen to office with an agenda of economic revival, Trump has pledged to return the world's largest economy to annual expansion of three percent or more.

The administration is counting on that robust growth -- which economists say may not be realistic -- to help pay for a proposed military buildup and multi-trillion-dollar tax cuts.

The revised GDP estimate, based on a more complete set of a data than was available in April, also reflected a smaller decrease in spending by state and local governments than originally reported. The Commerce Department will revise the data again in June.

Economists have been expecting a rebound in the April-June period, but a key indicator for the first month of the second quarter was only fair.

In a separate report, Commerce Department figures showed a dip in civilian aircraft sales helped depress orders for big-ticket US-manufactured goods in April, marking the first decline in five months.

The slowdown was smaller than analysts were expecting but appeared larger due to the steep upward revision in March's numbers.

Total orders for durable goods fell by 0.7 percent in April to $231.2 billion, down from March's robust 2.3 percent gain, and the slowest expansion since November.

An analyst consensus forecast had called for a far greater decrease of 1.8 percent last month.

The decline was largely driven by 9.2 percent drop in orders for civilian aircraft, but there were other signs of weakness.