US economic growth revised up at start of 2017

 
Jasper Jolly
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The US economy expanded faster than expected (Source: Getty)

The American economy grew faster than previously thought at the start of the year as consumption came in higher than expected, while a boost to exports also helped activity.

The US Bureau of Economic Analysis (BEA) revised up its measurement of the expansion in the economy to 1.4 per cent in the first quarter of 2017, after previously saying it grew by 1.2 per cent.

That was faster than economists had expected: the consensus was for growth to remain unchanged.

Consumer spending grew by 1.1 per cent, much quicker than the 0.6 per cent expansion the BEA had previously measured owing to a big underestimate of spending on services.

Read more: US growth falls to its slowest in three years

That upgrade was partly offset by a 1.1 per cent downward revision to gross private domestic investment.

The upward revision in total growth puts the White House in a stronger position to start raising US growth.

The embattled administration of US President Donald Trump has promised to deliver growth of three or even four per cent annually, a measure which the International Monetary Fund (IMF) has said is not likely, based on current policies.

Trump came to office at a time when the US economy was in relatively good health, with growth now above 1.4 per cent for the last year.

Dennis de Jong, managing director at UFX.com, said: "The figures will give Trump a platform to build on an upward trajectory in the remaining six months of the year in order to meet his bullish growth targets."

Read more: Fed hike in June a certainty? US GDP slowdown wasn't actually so bad

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