US Q1 GDP growth lowered to 1.9 per cent

Economic growth in the world's largest economy has slipped to 1.9 per cent in the first quarter on annualised basis, primarily due to lower government spending and increase in imports, a second estimate released Thursday by the US commerce department revealed.

This is a downward revision from the last month's advance projection of 2.2 per cent growth in real gross domestic product (GDP). The economy clocked a 3-per cent growth in the fourth quarter of 2012.

Latest data from the labour department on US jobless claims is also not encouraging. The number of people who applied for unemployment benefits for the week ending 26 May rose by 10,000 to a seasonally adjusted 373,000, the highest in five weeks.

The deceleration in real GDP in the first quarter primarily reflected a deceleration in private inventory investment, an acceleration in imports, and a deceleration in non-residential fixed investment that were partly offset by accelerations in exports and in personal consumption expenditures, the report on GDP said.

Personal consumption, which includes goods, both durable and non durable and services, increased 2.7 per cent in the first quarter over 2.1 per cent in the fourth quarter.

Gross private domestic investment including non-residential and residential increased at a much lower 6.3 per cent in the first quarter against a 22.1 per cent rise Q4.