US growth rate revised down to 1.8%

The US economy grew by less than previously estimated in the first quarter of the year, the Commerce Department has said.

Gross domestic product – which measures annual economic output – grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise.

Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision.

In the final quarter of 2012, the annualised growth rate had been 0.4%.

Tax impact
The revised figure surprised analysts, who had expected it to remain unchanged at 2.4%.

A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%.

Exports, which were previously reported as having risen, actually shrank by 1.1%, due to the weak global economy. Imports also contracted by 0.4%.

The payroll tax increases introduced in January and concerns about government spending cuts are thought to have forced households and businesses to delay spending and investment.

source: http://www.bbc.co.uk/