The U.S. economy slowed more than previously estimated in the first quarter amid the weakest performance in consumer spending in nearly five years, but growth appears to have since regained momentum on the back of a robust labor market and tax cuts.
Gross domestic product was increased at a 2.0 percent annual rate in the January-March period, the Commerce Department said on Thursday in its third estimate of first-quarter GDP, instead of the 2.2 percent pace it reported last month.
The economy grew at a 2.9 percent rate in the fourth quarter. The downgrade to first-quarter growth reflected weaker consumer spending and a smaller inventory accumulation than the government had estimated last month.
A $1.5 trillion income tax cut package, which came into effect in January, is seen spurring faster economic growth in the second quarter, putting annual GDP growth on track to achieve the Trump administration's 3 percent target.
Economists, however, caution that the administration's "America First" policies, which have heightened fears of trade wars, are casting a pall over the economy's prospects.