“Consumer spending cooled in the first quarter more than previously estimated as the jump in food and fuel costs held back the biggest part of the U.S. economy.
Household purchases rose at a 2.2 percent annual pace from January through March, less than the 2.7 percent calculated last month and short of the 2.8 percent median forecast of economists surveyed by Bloomberg News, according to Commerce Department figures issued today in Washington. The economy grew at a 1.8 percent pace last quarter, the same as previously calculated.
Stocks dropped as the report, combined with other data showing more Americans unexpectedly filed claims for jobless benefits, raised concern last quarter’s slowdown will persist. Manufacturing, at the forefront of the recovery that began in June 2009, may also cool this quarter amid parts shortages resulting from the disaster in Japan.
“Consumer spending was pretty anemic last quarter, and households are likely to be somewhat restrained going forward,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who had forecast GDP would be revised to 1.9 percent. “Economic growth will run a little faster than the first quarter but nothing blockbuster.””
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