Last quarter’s US economic growth revised, still slow
The U.S. economy grew at a lackluster 1.3% annual rate from January through March as businesses wary of an economic slowdown trimmed their inventories, the Associated Press reports. The previous government estimate was 1.1%.
The Commerce Department’s revised measure of growth in the nation’s gross domestic product — the economy’s total output of goods and services — marked a deceleration from 3.2% annual growth from July through September and 2.6% from October through December.
Despite the first-quarter slowdown, consumer spending, which accounts for around 70% of America’s economic output, rose at a 3.8% annual pace, the most in nearly two years and an encouraging sign of household confidence. Specifically, spending on physical goods, like appliances and cars, rose 6.3%, also the fastest growth rate since April–June of last year.
A cutback in business inventories shaved 2.1% off January–March growth.
Across the economy, the Fed’s interest rate increases have elevated the costs of auto loans, credit card borrowing, and business loans.
With mortgage rates doubling over the past year, the real estate market has suffered. Investment in housing fell at a 0.2% annual rate from January through March. In April, sales of existing homes were 23% below their level a year earlier.