Percent change in U.S. gross domestic product, which is the value of all goods and services produced in the United States. Change from previous quarter, annual rate:
Economy grew 2.4% in early 2013
People look for post-Christmas sales at a shopping mall in Los Angeles, California on December 26, 2012.(Photo: ROBYN BECK AFP/Getty Images)
The economy grew at a 2.4% annual rate during the first quarter, slightly less than the 2.5% originally estimated, the government said Thursday.
The biggest changes in estimated growth came from smaller accumulation of inventories by businesses and fewer exports, partly offset by fewer imports, the Bureau of Economic Analysis reported.
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The news appears to confirm economists' views that the federal spending cuts that took effect in June are slowing the economy, which grew at a 3.1% annual clip in the middle of last year before cuts in defense and other spending began showing up in the fourth quarter. For that quarter, the annualized growth rate was 0.4%.
The economy is on track to slow further: Data released so far about the second quarter suggest that gross domestic product will grow at a 1.9% annual rate, according to Moody's Analytics.
"The general picture of overall economic activity is not greatly changed,'' the BEA's announcement said.
Consumer spending, which accounts for 70% of the economy, grew at a relatively brisk 3.4% annual rate, almost twice as fast as in late 2012. Acceleration in purchases of non-durable goods and services drove the gains, an important sign that the recovery is spreading beyond sectors such as housing and automobile sales.
On the other hand, growth in private investment was a tepid 2.2%, with growth in non-residential real estate development dropping to 2.2% from 13.2% late last year. And federal government spending dropped 8.7%, as defense cuts mandated by the 2011 deal to raise the debt ceiling began to bite.