Forget the GDP headline.

The economy isn’t doing nearly as well as that 3.2% annual growth rate for gross domestic product reported Friday by the Commerce Department.

The heart of the real economy — private-sector consumption and investment — slowed sharply in the first quarter to a 1.3% annual rate, the slowest growth in nearly six years.

“ “On the outside, it looks like a shiny muscle car. Lift the hood, however, and you see a fragile one-cylinder engine.” ”

Consumer spending rose only 1.2% in the first quarter, after healthy 2.5% growth the previous quarter. Spending on durable goods plunged 5.3%, the worst since 2009.

Business investment also slowed, to 2.7% from 5.4%. Investments in structures, such as factories, offices, stores and oil wells, fell for the third straight quarter. Investments in equipment — computers, airplanes and machinery — barely grew, rising 0.2%.

Economists are projecting higher spending and investment in the current quarter, however. Retail sales and capital investment perked up in March, establishing stronger momentum for the second quarter.

The only bright spot in the first quarter was investment in intellectual property, such as software, movies and R&D. Investments in intellectual property accounted for about a third of the growth in private-sector growth. This is great news, but these intellectual property numbers are a bit squiggy.

Disappointment

Many economists were disappointed by the composition of growth in the first quarter.

“On the outside, it looks like a shiny muscle car,” wrote economist Bernard Baumohl of the Economic Outlook Group. “Lift the hood, however, and you see a fragile one cylinder engine.”

“First-quarter GDP is 3.2%, but the underlying data is much weaker and is consistent with a slowing economy,” said Jason Furman, former economic adviser for President Obama and a professor at Harvard University.

“Fed policy makers are going to look right past that 3.2% top-line number and focus on composition of growth, which will reaffirm its prudent pause,” said Joseph Brusuelas, chief economist at RSM.

Tax cut’s effect wears off

It may be coincidence, it may be statistical noise, but the economic momentum has slowed since the big tax cut was passed.

Final sales to private domestic purchasers have fallen three quarters in a row. Consumer spending has fallen three quarters in a row. Business investment is growing about one-fourth as fast as it was in the first quarter of 2018, when the corporate tax cut kicked in.

The tax cut was supposed to supercharge the private-sector, and it did — for a few quarters.

No one should panic over one quarterly number, but neither should one celebrate growth that isn’t sustainable. The 3.2% estimate for gross domestic product was boosted by one-off factors — a big improvement in the trade balance, a big build-up in inventories, and a big pop in state and local government spending.

This is real production, real money that was spent, but it can’t last.

“To the degree today’s data has any info, it is that the underlying trend of consumption and investment is weakening,” Furman said. “And no reason to believe we’ll get lucky again next quarter” with inventories, net exports and government spending.

Rex Nutting covers politics and economics for MarketWatch.