The U.S. economy slowed as expected in the first quarter, but a less robust pace of consumer spending and export growth than previously estimated could dampen the economic outlook for the current period.
Gross domestic product increased at a 1.9 percent annual rate, the Commerce Department said in its final reading on Thursday, unchanged from its estimate last month. That was in line with economists’ expectations.
However, when measured from the income side, the economy grew at a 3.1 percent pace in the first quarter, up from 2.6 percent in the previous quarter.
The tepid first-quarter pace of GDP growth was a step-down from the October-December period’s 3.0 percent rate.
It also reflected a slightly less sturdy accumulation of inventories by businesses and slower pace of investment in equipment and software than previously estimated.
Consumer spending, which accounts for about 70 percent of U.S. economic activity, increased at a 2.5 percent rate in first quarter, rather than the previously reported 2.7 percent pace.
There are signs that consumer spending slowed in the second quarter, with retail sales falling in April and May.
Business inventories increased $54.4 billion, instead of $57.7 billion, adding only 0.10 percentage point to GDP growth compared with 0.21 percentage point in the previous estimate.
Excluding inventories, the economy grew at a revised 1.8 percent rate in the first quarter, rather than 1.7 percent and up from 1.1 percent in the fourth quarter.
Exports grew at a 4.2 percent rate instead of 7.2 percent.
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