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Pro Analysis

Breakingviews: Cautious consumers provide new sort of Trump bump

A customer looks at a Ford F-150 pickup truck at a CarMax dealership in Brandywine, Md.
Hasan Sarbakhshian | Getty Images
A customer looks at a Ford F-150 pickup truck at a CarMax dealership in Brandywine, Md.

Cautious consumers are providing a new sort of Trump bump. The U.S. economy grew even slower than was expected, at an annualized rate of just 0.7 percent in the first quarter. The year typically starts slowly and the figures may be revised, but consumers have been less confident than investors. That could put a hitch in the president's ambitious plans.

Markets have hit record highs this year because of optimism over Donald Trump's economic plans, inspiring the "Trump bump" term. And while shopper sentiment has been buoyant, too, according to surveys, it hasn't translated into action. Consumer spending grew by only 0.2 percent in January and was nearly flat in February, bringing overall growth to 0.3 percent in the first quarter, the weakest pace since 2009. A drop in automobile purchases erased a half percentage point from GDP expansion.