New York: The American economy put in its slowest quarterly growth rate in three years in first three months of the year, increasing by an annualized 0.7 percent, according to the Commerce Department.

Ironically, the annual growth rate for the quarter is far below the 2.5 percent pace in President Barack Obama’s final three months in office, and even further behind President Trump’s 4 percent target.

Consumers were particularly wary regarding large purchases such as cars. The University of Michigan said its consumer sentiment index at the end of April showed a bullish reading of 97, up from 87.2 just before the election.

The first-quarter growth rate will be noticed by the Federal Reserve which has said it plans to raise interest rates twice more this year.

The rising cost of necessities like health care, housing and education is leaving less money for discretionary spending for middle-class Americans, said Stephanie Pomboy, founder of MacroMavens, an independent economics consulting firm in New York. Analysts and economists are now concentrating on the jobs report on Friday for further evidence of the state of the economy.