WASHINGTON, D.C. — The U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, but a surge in wages amid tightening labor market conditions and lower tax rates suggested the setback is likely temporary, reported Rueters.
Gross domestic product increased at a 2.3 percent annual rate, the Commerce Department said in its snapshot of first-quarter GDP on Friday, also restrained by a moderation in business spending on equipment and investment in homebuilding.
These factors were partially offset by a rise in inventories and a narrowing of the trade deficit. The economy grew at a 2.9 percent rate in the fourth quarter. Domestic demand increased at a 1.7 percent rate, the slowest in two years, after rising at a brisk 4.8 percent pace in the final three months of 2017.
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