WASHINGTON — The U.S. economy grew more slowly than economists expected in the first quarter, expanding at an annual rate of 2.7% due partly to weaker consumer spending, according to a Commerce Department report released Friday.
Economists expected no change in the third and final gross domestic product estimate of the quarter from the second estimate of 3% growth, according to the median forecast in a Thomson Reuters survey of economists. The first quarter ended March 31.
The core personal consumption expenditures figure was revised upward to a 0.7% gain from the 0.6% expansion reported last month.
Consumer spending, which accounts for about 70% of GDP, was revised downward to 3.0% from a 3.5% annual growth rate. The lower figure reflects new data from the Census Bureau's services survey — which tracks about 16% of personal consumption for hospital, legal service and software and other service expenditures — and new data on natural gas usage.
Consumer spending added 2.13 percentage points to GDP in this revision, down from 2.42 percentage points in the preliminary GDP revision.
Imports were revised higher to $2.25 trillion from $2.23 trillion, and the trade deficit was revised upward to $505.4 billion. Exports were revised to $1.75 trillion from $1.73 trillion. The trade deficit subtracted 0.82 percentage point from GDP, up from the 0.66 percentage point drag reported last month.
GDP rose 5.6% in the fourth quarter of 2009 and fell 2.4% for all of 2009.
Economists were expecting a 0.6% core PCE increase. The 0.7% rise in the core PCE was the smallest since records began in 1959.
Gross private domestic investment was revised higher to a 16.3% annual increase in the first quarter.