Gross domestic product increased at just a 0.7 percent annual rate in the first quarter of 2017, the Commerce Department said this morning. That was the weakest performance since the first quarter of 2014. In the fourth quarter of 2016, real GDP increased 2.1 percent.
Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, slowed to a 0.3 percent rate in the first quarter. That was the slowest pace since the fourth quarter of 2009 and followed the fourth quarter's robust 3.5 percent growth rate.
One factor was higher inflation, which saw the personal consumption expenditures index averaging 2.4 percent in the first quarter, the highest since the second quarter of 2011. That also weighed heavily on consumer spending.