Business

Consumer spending helps US economy trump forecasts in Q1

WASHINGTON: The US economy slowed less sharply in the first quarter than initially estimated due to unexpectedly high consumer spending and a jump in exports, beating expectations and providing a slightly more encouraging outlook for growth this year.

Gross domestic product increased at a 1.4 per cent annual rate instead of the 1.2 per cent pace reported last month, the Commerce Department said in its final assessment for the period yesterday.

It was still the worst performance since the second quarter of last year. Economists polled by Reuters had expected GDP growth to be unrevised at a 1.2 per cent rate.

The economy tends to underperform in the first quarter relative to the rest of the year due to perennial issues with the calculation of the data.

The US dollar briefly edged up after the release of the data before retracing earlier losses against a basket of currencies. Prices of US Treasuries were lower while US stock index futures were mixed.

First-quarter economic growth was boosted by an upward revision to consumer spending, which accounts for more than two-thirds of US economic activity. - REUTERS

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