WASHINGTON - US economic growth was a bit slower than initially thought in the first quarter as businesses restocked shelves at a moderate pace and government spending declined sharply.
Gross domestic product increased at a 1.9 percent annual rate, the Commerce Department said in its second estimate on Thursday, down from last month's 2.2% estimate. The economy grew at a 3.0% rate in the fourth quarter.
The report also showed that after-tax corporate profits dropped for the first time in three years.
A modest downward revision to consumer spending, which accounts for about 70% of US economic activity, and stronger import growth also accounted for the weaker first-quarter output. Economists polled by Reuters had expected growth would be revised down to a 1.9% pace.
Business inventories increased $57.7 billion, instead of $69.5 billion, adding only 0.21 percentage point to GDP growth compared with 0.59 percentage point in the previous estimate.