While the Commerce Department released a report on Friday showing stronger than previously estimated U.S. economic growth in the first quarter, the pace of growth still reflects a significant slowdown.
The report said the pace of growth in gross domestic product was upwardly revised to 0.8 percent from the initial estimate of 0.5 percent.
Nonetheless, the revised GDP growth in the first quarter compares to the 1.4 percent jump seen in the fourth quarter and the 0.9 percent increase expected by economists.
The Commerce Department said the stronger than previously estimate growth primarily reflected upward revisions to private inventory investment, residential fixed investment, and exports.
Imports, which are a subtraction in the calculation of GDP, were also downwardly revised to show a 0.2 percent dip compared to the previously reported 0.2 percent uptick.
The deceleration in GDP compared to the previous quarter was partly due to slower growth in personal spending, which climbed by 1.9 percent in the first quarter after jumping by 2.4 percent in the fourth quarter.
The report also showed a larger decrease in non-residential fixed investment and a downturn in federal government spending compared to the previous quarter.
However, an upturn in state and local government spending and an acceleration in residential fixed investment helped limit the downside.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The modest upward revision to first-quarter GDP growth to a still muted 0.8% annualized, from 0.5%, is nothing to worry about when the more recent incoming data point to a big pick-up in second-quarter growth."
"The Atlanta Fed's closely watched GDP tracker puts second-quarter growth at 2.9%, which looks about right to us," he added.
On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy prices, surged up by 2.1 percent in the first quarter after rising by 1.3 percent in the fourth quarter.
by RTT Staff Writer
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