Donald Trump gets lifeline: U.S. economic growth data reveals shocking findings after President's approval rating crashed

Donald Trump's approval rating on handling economic affairs are reportedly the lowest among American Presidents. However, there is a relief for the Republican President as the U.S. economic growth picked up in the first quarter on a rebound in government spending, but the increase is likely temporary as ​the war with Iran drives up gasoline prices and ​squeezes household budgets.

Gross domestic product increased at a 2.0 per cent annualized rate last quarter, the Commerce Department's Bureau of ​Economic Analysis said in its advance GDP estimate on Thursday. Economists polled by Reuters had forecast GDP growth increasing at a 2.3 per cent annualized rate. Much of the growth came from a partial reversal in government outlays.

Meanwhile, the U.S. Commerce Department said on Thursday its Personal Consumption Expenditures Price Index (PCE) rose in line with expectations in March, the latest sign ‌that inflation remained relatively well ⁠behaved despite ⁠the war with Iran. March PCE rose 3.5 per cent year over year, matching the consensus estimate, while rising 0.7 per cent from February, also matching estimates. The core PCE price index, excluding volatile food ​and energy prices, rose 0.3 per cent as expected.


Treasury securities rallied ​on Thursday morning, with the yields on the 2-year and 10-year Treasury notes falling. The 2-year note was down 6 basis points to 3.89 per cent and the 10-year note was off 3 basis points to 4.38 per cent.

"High growth isn’t always healthy growth. Half a percentage point of GDP growth came from computers and another half from healthcare. It’s not a shaky foundation for growth, but not the most solid either," Brian Jacobsen, Chief Economist, Annex Wealth Management stated.

"Well, 2.0% GDP was a rebound from the low growth rate in Q4, which was ⁠mostly due ‌to the government shutdown. The first quarter suggests that we're probably going to average 2.5% for the year, is solid ​growth, but certainly nothing ​that you can describe as extreme. It’s basically the average GDP growth that we've had for the past four ⁠to five years," Peter Cardillo, chief market economist, Spartan Capital Securities said.