WASHINGTON (Reuters) – U.S. economic growth accelerated in the first quarter, the government confirmed on Thursday, but the export and inventory boost to activity masked weakness in domestic demand, some of which appears to have prevailed in the current period. week acknowledged the temporary lift to economic growth from trade and inventories, which he described as “components that are not generally reliable indicators of ongoing momentum.” The U.S. central bank last Wednesday signaled interest rate cuts as early as July, citing rising risks to the economy, especially from an escalation in the trade conflict between the United States and China, and low inflation. “First-quarter GDP paints a misleading picture of the U.S. economy’s vigor at the start of the year, and second-quarter GDP will come as a timely reminder that the economy is now well past its inflection point,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York. Gross domestic product increased at a 3.1% annualized rate, also driven by more spending on highways and defense, the Commerce Department said in its third reading of first-quarter GDP. That was unchanged from its estimate last month and in line with economists’ expectations. The economy grew at a 2.2% pace in the October-December period. Despite the unchanged reading, growth in consumer spending was revised lower and business investment in intellectual property products was stronger than previously estimated. There were also upward revisions to spending on nonresidential structures and government expenditure. Revisions to the trade deficit and inventory accumulation were minor. Excluding trade, inventories and government spending, the economy grew at only a 1.3% rate in the first quarter. That was the slowest rise in this measure of domestic demand since the second quarter of 2013. When measured from the income side, the economy grew at a tepid 1.0% rate in the last quarter. Gross domestic income (GDI) was previously reported to have increased at a rate of 1.4%. The income side of the growth ledger was curbed by a dip in profits. After-tax profits without inventory valuation and capital consumption adjustment, which correspond to S&P 500 profits, fell at a 0.2% rate as earnings of domestic nonfinancial corporations decreased. The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 2.1% rate in the January-March period, down from the 2.2% growth pace estimated last month. Inflation was also muted in the first quarter. A gauge of inflation tracked by the Fed increased at a 1.2% rate, revised up from the previously reported 1.0% pace. The economy will mark 10 years of expansion in July, the longest on record. But momentum is slowing, with manufacturing struggling, the trade deficit widening again and the housing sector still mired in a soft patch. While consumer spending appears to have regained speed in the second quarter, business investment in equipment is expected to have contracted further following Wednesday’s weak report on durable goods orders in May. The trade war between Washington and Beijing is hurting both business and consumer confidence. “Just as the expansion is set to become the longest in U.S. history, recession fears have increased,” said Scott Hoyt, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “U.S. businesses appear spooked by the president’s capricious trade policy.” The Atlanta Fed is forecasting GDP growth to rise at a 1.9% annualized rate in the April-June quarter.