US grows by a slower 1.9% in Q1
Source: Agencies |
June 1, 2012, Friday
|
Print Edition
Print Edition
THE US economy grew at an annual rate of 1.9 percent in the first three months of this year, slower than first estimated.
The US Commerce Department yesterday lowered its estimate for January-March growth from an initial estimate of 2.2 percent. The downward revision was largely because consumers and governments spent less than first estimated, businesses restocked more slowly, and the US trade deficit grew sharply.
Analysts believe the economy is growing at a slightly faster rate this spring. They estimate growth at an annual rate of between 2 percent and 2.5 percent in the April-June quarter. Many expect the economy will maintain that pace for all of 2012, an improvement from last year's 1.7 percent growth.
Still, growth of 2.5 percent is just enough just to keep pace with population changes. Most economists say it takes almost twice as much growth to lower the jobless rate by 1 percentage point over a year.
A rising trade deficit slows growth because the country is spending more on foreign-made products than it is on US-made goods. Less restocking means companies ordered fewer goods, which decreases factory production and weighs on growth.
Consumer spending grew at an annual rate of 2.7 percent in the first quarter. While that was the fastest pace since the end of 2010, it was down from an initial estimate of 2.9 percent.
The US Commerce Department yesterday lowered its estimate for January-March growth from an initial estimate of 2.2 percent. The downward revision was largely because consumers and governments spent less than first estimated, businesses restocked more slowly, and the US trade deficit grew sharply.
Analysts believe the economy is growing at a slightly faster rate this spring. They estimate growth at an annual rate of between 2 percent and 2.5 percent in the April-June quarter. Many expect the economy will maintain that pace for all of 2012, an improvement from last year's 1.7 percent growth.
Still, growth of 2.5 percent is just enough just to keep pace with population changes. Most economists say it takes almost twice as much growth to lower the jobless rate by 1 percentage point over a year.
A rising trade deficit slows growth because the country is spending more on foreign-made products than it is on US-made goods. Less restocking means companies ordered fewer goods, which decreases factory production and weighs on growth.
Consumer spending grew at an annual rate of 2.7 percent in the first quarter. While that was the fastest pace since the end of 2010, it was down from an initial estimate of 2.9 percent.
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