Economy In U.S. Expanded Less Than Previously Estimated

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http://www.bloomberg.com/news/2012-05-31/economy-in-u-s-grew-less-in-first-quarter-than-last-estimated.html


The U.S. economy grew more slowly in the first quarter than previously estimated, reflecting smaller gains in inventories and bigger government cutbacks.

Gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate, revised Commerce Department figures showed today in Washington. The report also showed corporate profits rose at the slowest pace in more than three years and smaller wage gains at the end of 2011.

Consumer spending at retailers and car dealerships kept the economy moving forward last quarter just as businesses investment cooled, showing why the economy needs to generate bigger job gains to sustain the expansion. The threat of a slump in Europe adds to concerns the U.S. recovery will struggle to gain speed.

“Growth comes down to the consumer and whether the consumer can pick up the baton and actually carry this recovery,” Aneta Markowska, a senior U.S. economist at Societe Generale in New York, said before the report. “In the first quarter, they performed pretty well. I’m concerned that won’t be sustained because we know it was driven by better employment numbers that are already fading.”

Other reports today showed more Americans than projected filed claims for jobless benefits last week and companies added fewer workers than forecast in May.