WASHINGTON - of unexpectedly low consumer spending hinders the economy in the signs first quarter and fresh of a slowdown in the market work emphasized a struggle to recovery.
The economy grew at an annual rate of 1.8% in the first three months of this year, the Commerce Department said Thursday, unchanged from an earlier estimate and lower than most forecasts.
A separate report of the Ministry of labour has shown the number of Americans seeking unemployment benefits rose unexpectedly the week last by 10 to 424 000.
Some of the slowdown in growth was linked to poor weather conditions in early 2011 and a decrease of 11.7% of military spending, trends which are expected to return in the second quarter.
But economists were less hopeful on the back of rebound expected growth, citing the rise in jobless claims and a moderation in output of plant, which has been hit by disruptions in supply chains after the earthquake of March to the Japan.
"The rebound in the second quarter is likely to be muted," said Nigel Gault, Chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
Currently in the second quarter gross domestic product growth estimates vary between 2.5 and 3.5%, but could be revised. Recent data, including sales, retail and regional manufacturing surveys all emphasize soft growth.
The economy grew at a rate of 3.1 per cent during the period from October to December. Economists had expected the pace in the first quarter to be revised by 2.1%.
WEAK CONSUMER SPENDING
Investors on Wall Street excluded data and bought stocks. Liaison for the American Government prices rallied, stimulated by flight safety buying on concerns over European sovereign debt crisis. The dollar had lost against a basket of currencies.
Despite seven straight quarters economy expansion, growth has been lukewarm fragilities, leaving the two Obama administration and opposition Republicans scrambling of ideas to put on a faster track.
Thursday White House has announced measures to reduce the costs of complying with government regulations for businesses, while legislators unveiled job creation proposals Republicans - who have been in large part a repackaging of the policies they advocated for a long time.
Expenses - which represents more than two-thirds of economic activity U.S. - expanded at a rate of 2.2 per cent in the first three months of this year, slower than the previously reported 2.7 per cent of consumption.
After rising to a clip of 4 percent in the fourth quarter, spending has been cut by high food and prices of gasoline, which has sent inflation rising at its fastest pace in 2-1/2 years.
The index of prices for personal consumption expenditures increased at a rate not revised by 3.8% in the first quarter. Than the increase of 1.7% in the fourth quarter.
The core PCE index, which is closely watched by the Federal Reserve increased at a rate of 1.4%, the fastest pace since the fourth quarter of 2009.
Fed officials would like to see this measure nearly 2%. The slowdown in growth medium pace of the US Central Bank will be not pressed its interest rate, after it concludes its $ 600 billion, the Government in June binding purchase program.
"This may delay the day when the Fed began to standardize the rates of interest until even later, on the road," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. "The Fed will want to see GDP above 3%, certainly before taking their foot gas.".
Although consumer spending withdrew in the first quarter, economists are hopeful that a recent cooling of energy and food prices and will facilitate the burden on the household budget and to stimulate spending.
The eclipsed soft consumer spending increased 52.2 billion in inventories of business, which was well above the rise of 43.8 billion initially reported.
But a decrease in the production of vehicles so far in this quarter due to lack of parts of the Japan could cause a lowering of the level of stocks and weigh on growth in the period April-June.
Exit vehicle motor added 1.28 percentage points of GDP in the first quarter.
The GDP report also showed after-tax corporate profits fell at a rate of 0.9% in the first quarter after rising to a 3.3% pace in the fourth quarter.
The decline in profits, the first since the fourth quarter of 2008, probably reflects a slowdown in the growth of productivity as companies intensified for hiring. Economists had expected the profits of the business to grow at a 2.3% pace.
However, place the week last suggested initial claims that could slow down the pace of hiring. Economists had expected claims drag to 400,000. Last week marked the seventh consecutive week in which claims topped the 400,000 level that economists say is normally associated with the growth of stable employment.
"The weakness in the jobless claims data persisted too long to ignore and suggests that the labour market, which had been a bright spot in the first quarter, turns a little warmer in the second quarter," said Michael Ferolian economist at JPMorgan in New York.
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