WASHINGTON — Real gross domestic product expanded at a 1.8% annual rate in the first quarter of 2011 as imports and slower consumer and government spending hindered growth, the Commerce Department reported Thursday.
Personal consumption expenditures increased 2.7% for the three months ending March 31. Core personal consumption expenditures — which exclude food and energy and is the Federal Reserve’s preferred measure of inflation — gained 1.5% for the quarter, the largest increase in 15 months.
The GDP growth was the smallest since the second quarter of 2010, when the economy grew 1.7%.
The U.S. has had seven consecutive quarters of GDP growth following the official end of the recession in June 2009.
In the fourth quarter, GDP rose 3.1%, PCE gained 4.0% and core PCE increased 0.4%.
Economists polled by Thomson Reuters expected GDP to expand 2.0% for the quarter and for core PCE growth to increase 1.4%.
The largest drag on economic growth for the quarter came from a decline in government spending, which fell for the second straight quarter. Military spending declined 11.7% for the quarter, the largest drop since the fourth quarter of 2005.
Total government spending subtracted 1.09 percentage points from GDP, the largest subtraction since the fourth quarter of 1983.
The state and local government sector continued to weigh on GDP growth as spending declined 3.3%, the biggest fall since the first quarter of last year.
Imports, which subtract from GDP growth, increased 4.4% for the quarter. Exports increased 4.9%, and the trade deficit subtracted just 0.08 of a percentage point from GDP growth.
Business investment increased 8.5% last quarter, returning to growth after business spending paused in the fourth quarter of last year.
Construction investment declined as spending on structures and residential properties dropped.
