US GDP growth falls to its slowest in three years

 
Emma Haslett
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US GDP growth disappointed (Source: Getty)

US GDP growth plummeted in the first quarter, falling to 0.7 per cent - its weakest quarterly growth in three years.

Analysts had expected growth of 1.2 per cent, down from 2.1 per cent in the last quarter of 2016.

Meanwhile, inflation rose to 2.2 per cent, from 2.1 per cent.

The dollar, which had fallen against the euro ahead of the figures, edged up from session lows to €0.9165, 0.3 per cent down. It also regained some losses against the pound, rising to £0.7737, 0.2 per cent down.

Nancy Curtin, chief investment officer at Close Brothers Asset Management, said it is not time to panic.

"US GDP figures are typically weaker in [the first quarter] so this reading is in line with the seasonal trend," she said.

"We haven’t yet had the expected fiscal stimulus from Trump, the effects of which may not be seen until the end of this year or the start of 2018.

“While investors might be disappointed with the reading, it has been a steady start to the year with inflation looking benign, a resilient jobs market and positive PMI data, all likely to boost returns for investors.”

Read more: UK GDP growth fell back to earth in the first quarter

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