U.S. economic expansion slows more than anticipated in first quarter
WASHINGTON (MarketWatch) - The U.S. economy slowed more than expected in the first quarter, the Commerce Department reported Friday. Real gross domestic product rose at a 2.2% annualized rate in the first quarter, down from a 3.0% increase in the fourth quarter. Economists had expected a stronger 2.7% growth rate. The big story for the first quarter was the slowdown in business spending and inventory investment. The government sector also dampened growth. This weakness was partially offset by stronger consumer spending and exports. At the same time as the economy slowed, inflation accelerated. The personal consumption expenditure index rose 2.4% in the first quarter, the fastest pace since the second quarter of 2011. The core personal consumption index rose 2.0% after a 1.4% gain in the fourth quarter.