A boost in consumer spending pushed first-quarter growth higher than expected, Reuters reports.
The U.S.’s first quarter GDP was upwardly revised from an initial report of 1.2% growth to 1.4% growth at an annual rate, the Commerce Department said.
While the figure beat analyst estimates, it was still the worst reading since the second quarter of 2016. Still, the growth rate eased fears that the U.S. economy was slowing.
The government in April projected growth of 0.7%. The upward revision came despite a downward revision in inventory data.
The greenback was boosted after the data release, but eventually returned to earlier losses against other major currencies. Wall Street and U.S. Treasuries prices were also lower.
An upward revision to consumer spending, which accounts for two-thirds of economy activity, boosted first-quarter economic growth in the U.S. Consumer spending increased by 1.1%, its weakest gain since 2013, but was significantly higher than the 0.6% reading last month.
Exports were also revised upward from a 5.8% to 7% growth rate. In the fourth quarter, exports fell at a 4.5% rate.
Business inventories subtracted 1.11 percentage point from the U.S.’s GDP growth, up from the 1.07 percentage point initially reported.
Corporate profits after tax, adjusted for capital consumption and inventory valuation, fell by 2.7% annually after increasing at a 2.3% pace in the previous quarter.
While the upward revision to the GDP is promising, reaching the Trump administration’s goal of 3% growth remains a major challenge. The United States, Reuters says, has not seen 3% growth since the 1990s.
In 2016, the economy expanded at a 1.6% rate, its weakest growth in five years.
A separate report on Thursday showed that the labor market was still going strong. The Labor Department reported that while the number of jobless claims rose slightly, the underlying trend still points to a tightening labor market.