Spending lifts US GDP growth in Q1
Expansion weakest since year-ago period
washington — US economic growth slowed in the first quarter although not as sharply as initially thought, amid a surge in spending on home building and a steady increase in inventory investment by businesses.
Gross domestic product rose at a 0.8 per cent annual rate as opposed to the 0.5 per cent pace reported last month, the Commerce Department said in its second GDP estimate on Friday. It was the weakest performance since the first quarter of 2015.
The upward revision to the firstquarter GDP growth estimate also reflected a smaller drag from trade than previously reported. The government also reported a rebound in after-tax corporate profits, which increased at a 0.6 per cent rate in the first quarter after plunging at an 8.4 per cent pace in the fourth quarter.
When measured from the income side, the economy grew at a 2.2 per cent rate after expanding at a 1.9 per cent pace in the fourth quarter.
The economy has been hurt by a strong dollar and sluggish global demand, which have eroded export growth. It has also been squeezed by lower oil prices, which have undercut profits of oilfield companies like Schlumberger and Halliburton , forcing them to slash spending on equipment.
Economists also believe the model used by the government to strip out seasonal patterns from data is not fully accomplishing its goal despite steps last year to address the problem.
Residual seasonality has plagued first-quarter GDP data, with growth underperforming in five of the last six years since the economic recovery started in the middle of 2009.
There are signs the economy regained momentum early in the second