US GDP growth slows to 2.2% in Q1
WASHINGTON The United States economy expanded at a slightly slower pace in the first three months of the year as a drop in home buying offset an increase in business investment, the Commerce Department said yesterday.
More complete data on the economy show Gross Domestic Product increased by 2.2 per cent in the first quarter, a tenth of a per cent lower than in the preliminary report last month.
That was still significantly slower than the 2.9 per cent growth seen at the end of last year, and further from the White House goal of three per cent expansion, despite the massive tax cut approved last December that was expected to juice the economy.
That slowdown was attributed to a decline in exports, household spending and government spending at all levels, the report said.
Economists had expected GDP to remain steady at 2.3 per cent as reported in the preliminary estimate.
Still, first quarters often tend to be slower than other periods, and the data will be revised once more next month.
The 2 per cent decline in residential fixed investment - essentially home buying - was a significant contributor to the downward revision in the second GDP estimate, even though it was offset by a big increase in business investment.
Slower household spending on services, including healthcare, also fed into the slower GDP. But that was offset by higher spending on goods, notably used vehicles.
Meanwhile, imports, which subtract from growth, were slightly higher than first estimated. - AFP