The sluggish global economy will continue to
weigh on consumer spending in the coming months,
The economy expanded at a 1.8% annual pace in the first three
months of the year, far slower than the 2.4% pace estimated just a month ago.
The latest revision came largely from weaker-than-expected
consumer spending particularly in the services sector—and substantially slower
business investment.
GDP growth was revised downward for the first quarter from 2.4 to 1.8 percent because: consumer spending, business investment and exports grew less than previous
The government offers three readings of the nation's gross
domestic product in the months after a quarter ends, updating its estimates
each time based on new information.
The initial estimate of first-quarter growth, in late April, came in at 2.5%.
The initial estimate of first-quarter growth, in late April, came in at 2.5%.
Releasing reports based on incomplete data isn't unusual for government agencies, considering the demand by investors and policy makers for up-to-date snapshots of the economy's performance. The Commerce Department's Bureau of Economic Analysis says rather, it is a trade-off between timeliness, accuracy and relevance.
The Commerce Department offered an unpleasant surprise Wednesday in its latest estimate of U.S. economic growth: an unusually sharp downward revision to first-quarter growth.The agency typically needs to make smaller revisions between its second and third estimates of GDP.