In the first quarter of 2017, America's GDP only grew 0.7 percent, running counter to President Donald Trump's campaign rhetoric. | AP Photo Weak economy collides with Trump's lofty rhetoric A White House that seized credit for strong economic data in its early days now faces disappointing figures a few months in.

NEW YORK — The U.S. economy was not great again in the first quarter of Donald Trump’s presidency.

The Commerce Department said Friday that gross domestic product expanded at just a 0.7 percent annual rate in the first three months of the year, a sharp drop from the 2.1 percent growth in the final quarter of last year. It marked the economy's worst performance since the first quarter of 2014.


First-quarter GDP data has been notoriously bad in recent years only to improve in subsequent months. But the grim headline a day before Trump travels to Pennsylvania to celebrate his first 100 days delivers a significant political blow to a president who loves to hype economic data like strong jobs reports even though his policies so far have little to do with them.

“If you step back and look at the details, I’m quite confident the economy didn’t grow at 0.7 percent in the first quarter, in fact it was much better than that,” said Ian Shepherdson of Pantheon Macroeconomics, noting the drag from delayed tax refunds, weather and other distortions.

“But the optics of these numbers are more important because people don’t pore over the details,” he said. “The front-page headlines will all be that the economy barely grew at all in the first quarter of Trump’s presidency. And I’m quite sure if the economy grew 5 percent he would be crowing that it was all because of him.”

Trump as a candidate frequently pledged to jump-start growth — to exceed 3 percent — despite longstanding factors, such as demographics, that have kept average annual GDP growth closer to 2 percent.

After February’s strong jobs report, Trump retweeted a claim that the 235,000 number showed America was already “great again.” White House press secretary Sean Spicer said at the time that Trump now believed in jobs data that he regularly dismissed as fake under President Obama.

Trump had less to cheer about when the March employment report showed a much lower-than-expected 98,000 new jobs.

But by touting every good number, Trump now owns the dismal first-quarter GDP figure even though most economists believe the second quarter will show a bounce back to 2 percent or better growth. In the first quarter of 2014, the economy contracted at a stunning 2.9 percent rate only to snap back sharply later in the year.

Trump is now displaying the risks associated with leaping onto highly volatile economic data that is subject to multiple revisions and can tell a very misleading story when taken out of context of longer term trends.

“Not a strong start to a year filled with hope and promise with the incoming pro-business Trump administration,” MUFG Union Bank’s Chris Rupkey wrote in a note to clients. “Trump's economics team needs to step up their game as the economy is starting out the year in a hole. Our guess is they will lay the blame for this squarely at Obama's door. Time will tell whether this is just a pot hole on the road to prosperity.”

The weak first-quarter growth numbers stand in sharp contrast to other “soft” economic data including sky-high business and consumer confidence numbers, which Trump has also cited as evidence that his policies of fewer regulations and plans for big corporate and individual tax breaks were lighting a fire under an economy that has averaged around two percent growth for the last decade.

The stock market also reflects fervent hope for faster growth under Trump with the Dow, Nasdaq and S&P 500 all hitting new highs in the months after the presidential election. But the “hard” data, including GDP and job growth show that nothing has really changed so far under a new president who has yet to sign any major legislation and faces big hurdles to get his proposed tax cuts through Congress.

Republicans seized on the weak number Friday, blaming it on Obama and arguing it made the case for Trump’s agenda.

“This report underscores the urgent need for pro-growth tax reform. For eight years, the Obama Administration focused on growing the size and scope of the federal government” House Ways and Means Committee Chairman Kevin Brady said in a prepared statement. “President Trump proved again this week that he is focused on growing our economy and leading America in a new direction.”

The numbers showed that slower inventory growth subtracted 0.9 percentage points from the GDP number. The unexpectedly weak consumer spending growth of just 0.3 percent may have reflected late tax returns and unusually warm weather driving down spending on utilities.

But none of that will translate into headlines for a president obsessed by front-page media coverage.

“Politics isn’t about details, it’s about headlines,” said Shepherdson. “And these headlines are going to be awful.”