US Q1 2019 GDP growth revised down to 3.1% in second report

US Q1 2019 gross domestic product (GDP) grew by 3.1% in a revised report from the US Commerce Department. Though the statistic is better than Wall Street’s estimate of 3%, the growth is less than the first Q1 GDP reading with a 3.2% increase.

US Q1 GDP:key figures

Government and consumer spending rose to help US Q1 GDP

US Q1 GDP grew because of spending by local and state governments. Government spending grew by 2.5%. Personal spending increased overall by 1.3%, but decreased in purchases of large items like cars and appliances.

In addition to a surge in spending, US GDP rose because of an increase in exports. Exports surged by 4.8% before the current escalation of the US-China trade war, but imports fell by 2.5%.

What do economists say about US Q2 GDP?

Despite the mostly positive news about US Q1 GDP, some economists are concerned about the future of US GDP. Mark Zandi, chief economist at Moody’s, noted that a prolonged US-China trade conflict could weigh on US Q2 GDP.

‘If the trade war escalates and the [US] President [Donald Trump] follows through on his threat to raise tariffs on all Chinese imports, GDP growth will fall below 2% this year and unemployment will start to rise. The risks of a recession will become very high,’ said Zandi.

Mark Hamrick, an economic analyst with Bankrate.com, also believes that the stalled US-China trade talks could impact US Q2 GDP.

‘Headwinds abound in the US economy approaching the midway point of the year, including the real impacts of tariffs and uncertainty surrounding US-China trade talks,’ said Hamrick.