World News Today: Growth in the US economy slows

Thursday, April 28, 2011

Growth in the US economy slows

The figure is a first estimate, and could be revised either up or down in the coming months

Official figures show US economic growth slowed in the first three months of 2011 to an annualised rate of 1.8%.

This compares with an annual GDP rate of 3.2% from the Commerce Department in the previous quarter.

US GDP is expressed as an annualised rate, or annual pace, which shows what the three months' economic activity would mean if it carried on for a year.

The figure is a first estimate, and could be revised either up or down in the coming months.

Economic growth has been hampered by high energy prices which have weakened consumer spending.

Analysts said that althought the data was disappointing, it was not unexpected after heavy winter weather in the first quarter.

"It's very much in line with consensus. The underlying components were a little better than what I had expected. The biggest factor was weather. It hurt consumption and construction," said Stephen Stanley of Pierpont Securities.

"Energy also hurt consumption as well. Higher gasoline prices took a bigger bite out of people's budget."

On Wednesday, the US Federal Reserve cut its economic growth forecast for this year, citing weaker growth for the first quarter.

This article is from the BBC News website. � British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.