US economic growth for last quarter expanded slightly to 1.4% annual rate

The American economy expanded at a 1.4 per cent annual pace from January through March, the slowest quarterly growth since spring 2022, the government said Thursday in a slight upgrade from its previous estimate. Consumer spending grew just 1.5 per cent, down from an initial estimate of 2 per cent in a sign that high interest rates may be taking a toll on the economy.

The Commerce Department had previously estimated that the gross domestic product the economy's total output of goods and services advanced at a 1.3 per cent rate last quarter.

The first quarter's GDP growth marked a sharp pullback from a strong 3.4 per cent pace during the final three months of 2023. Still, Thursday's report showed that the January-March slowdown was caused mainly by two factors a surge in imports and a drop in business inventories that can bounce around from quarter to quarter and don't necessarily reflect the underlying health of the economy.

Imports shaved 0.82 percentage point off first-quarter growth. Lower inventories subtracted 0.42 percentage point.

Most economists think growth has picked up in the current quarter. Matthew Martin, US economist at Oxford Economics, has estimated an annual growth rate of around 2 per cent for April through June, fuelled by continued spending by America's consumers. A forecasting tool produced by the Federal Reserve Bank of Atlanta predicts a much stronger growth rate 3 per cent.