Economic activity declined in the latest quarter, slowing to its weakest in three years due to lower consumer spending and as businesses spent less on inventories. Gross Domestic Product fell to 0.7% in the first quarter of 2017, below the 1.1% expected and below the 2.1% recorded in Q4 2016. In addition, consumer spending plunged to 0.3% from 3.5% in the fourth quarter, the weakest since Q4 2009.
The weak consumer spending was blamed on the mild winter where consumers paid less for utility costs. However, the inflation reading personal consumption component rose 2.4%, the highest since Q2 2011. Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. It is considered the broadest measure of economic activity.
Consumer Sentiment sipped a bit in April from March, though remained strong as Americans were still generally optimistic during the month. The Consumer Sentiment index slipped to 97.0 from the 98.0 recorded in March. A spokesperson from the index said there was widespread agreement among consumers on their very positive assessments of the current state of the economy as well as widespread disagreement on future economic prospects.
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