The U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, but the setback is likely temporary against the backdrop of a tightening labor market and large fiscal stimulus.

As reported by Reuters, Gross domestic product increased at a 2.3% annual rate, the Commerce Department said in its snapshot of first-quarter GDP on Friday (April 27), also held back by a moderation in business spending on equipment and investment in homebuilding.

The economy grew at a 2.9% pace in the fourth quarter. Economists polled by Reuters had forecast output rising at a 2% rate in the January-March period.

The first-quarter growth pace is, however, probably not a true reflection of the economy, despite the weakness in consumer spending. First-quarter GDP tends to be sluggish because of a seasonal quirk. The labor market is near full employment and both business and consumer confidence are strong.

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