US economy slows in first quarterApril 29th, 2011 - 11:18 am ICT by IANS
Washington, April 29 (IANS/EFE) The US economy grew at an annualised rate of 1.8 percent in the first quarter, down from 3.1 percent in the final three months of 2010, the commerce department said.
Gross domestic product grew 2.9 percent overall last year, the government said last month.
In Thursday’s report, the first of three estimates of first-quarter GDP, the commerce department attributed the slowdown to a deceleration of consumer spending in the face of higher prices for food and fuel as well as to declines in the housing and government sectors.
Spending by consumers accounts for roughly 70 percent of US GDP.
A consensus of economists’ forecasts had called for 2 percent GDP growth in January-March and the official numbers disappointed financial markets, spurring a 0.2 percent decline in the S&P; 500 Index.
The first quarter saw the US trade deficit rise and the biggest reduction in government spending since 1983.
The Federal Reserve, which said Wednesday that it will keep interest rates at the present very low levels to maintain the pace of economic recovery, has revised downward its growth projections for 2011, from a range of 3.4-3.9 percent to one of 3.1-3.3 percent.
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