Gross Domestic Product (GDP) showed only slight growth Friday in the first quarterly report since President Donald Trump entered office.
GDP tracks the total dollar value of all goods and services produced over a specific time period. It jumped in the third quarter of last year to 3.5 percent after being stuck around one percent. The Bureau of Economic Analysis (BEA) found in its advance estimates that it only increased by 0.7 percent annual rate in the first quarter of 2017.
“The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed investment, exports, residential fixed investment, and personal consumption expenditures (PCE), that were offset by negative contributions from private inventory investment, state and local government spending, and federal government spending,” the report states. “Imports, which are a subtraction in the calculation of GDP, increased.”
Trump entered office promising to help both the businesses community and workers. His plan to decrease regulations and lower taxes has prompted optimism in the economy. House Ways and Means Committee Chairman Kevin Brady argues the report doesn’t reflect poorly on the administration but rather shows how important it is those policies get implemented.
“This report underscores the urgent need for pro-growth tax reform,” Brady said in a statement. “Now, for the first time in over 30 years, the House, Senate, and White House are moving forward together with comprehensive tax reform that will create jobs, increase wages, and increase America’s competitiveness.”
The Federal Reserve has been slowly raising interest rates in recent months in response to improving economic conditions. Interest rates were kept low for the last decade to help stimulate the economy after the most recent recession. The Economic Policy Institute (EPI) warns against raising rates given the lackluster growth.
“The economy’s weakness in the first quarter of 2017 was broad-based,” EPI said in a statement. “Between the broad-based economic weakness and continued below-target inflation, today’s report provides a powerful signal that the Federal Reserve should not raise rates in the next Federal Open Market Committee meeting.”
GDP displayed slow growth throughout the years following the recession, but it still remained at least at one percent over the past few years. The latest report reflects the lowest numbers in about three years. The economy hasn’t fully recovered since the last recession, but over the last couple of years, it has shown improved employment and economic growth.
The BEA report reflects the advanced findings for the first quarter of this year. The report is based on source data that is incomplete or subject to further revisions. The finalized first quarter report is scheduled to be released on June 29.
The Bureau of Labor Statistics (BLS) has tracked steady employment growth over the last couple of years with the economy finally starting to strengthen. The most recent jobs report, however, showed that the labor market only grew slightly with an additional 98,000 new jobs. The previous jobs reports over the last year usually saw greater job growth closer to 200,000.
Trump has focused much of his presidency on protecting domestic workers from unfair foreign competition. He has primarily targeted trade and immigration as problematic areas. Some on the right warn that too much economic protectionism could even hurt the same domestic workers it’s meant to help.
Trump released a summary of his plan to overhaul the tax system Wednesday. The president hopes to simplify the tax code and lower rates. The plan reflected many of the same ideas that were detailed in a tax blueprint released by congressional leaders last year.