US economic growth in the opening quarter this year was the weakest in more than four years as businesses sold off inventories and Americans imported more foreign goods, the government reported today.
The Commerce Department revised down its estimate for first-quarter expansion in GDP to 0.6 per cent from 1.3 per cent that it estimated a month ago.
It was the slowest rate of quarterly growth since the fourth quarter of 2002 when the economy edged ahead at a 0.2 per cent rate, and was below Wall Street economists' forecasts for a 0.8 per cent quarterly growth rate.
Although the first-quarter growth rate was cut in half, some key components of GDP showed resilience that may foster a healthier pace of expansion later in the year. Personal consumption spending that fuels two-thirds of national economic activity rose at an upwardly revised rate of 4.4 per cent instead of 3.8 per cent estimated a month ago.
It was the strongest pace of consumer spending since the first quarter of 2006 when it increased at a 4.8 per cent rate.
Bond prices fell slightly after the GDP data was published as investors apparently saw it as a sign that official interest rates were less likely to be reduced. Stock futures prices held their gains, while the dollar fell against the euro.
Separately, Labor Department data showed new claims for jobless pay fell a larger-than-expected 4,000 last week to 310,000, an indication the job market remains healthy enough to support continued spending by consumers.