US economic growth slowed in the first quarter but not as sharply as previously estimated, with gains in exports and software investment partially offsetting weak consumer spending.
Gross domestic product increased at a 1.1% annual rate, rather than the 0.8% pace reported last month, the Commerce Department said on Tuesday in its third GDP estimate, Reuters reported.
First-quarter GDP growth has now been revised higher by six-tenths of a point since the advance estimate was published in April. The economy grew at a rate of 1.4% in the fourth quarter. The first-quarter revision was broadly in line with economists' expectations.
There are signs the economy has regained momentum in the second quarter, with retail sales and home sales rising in both April and May, even though business spending continues to struggle and job growth has slowed. But uncertainty stoked by Britain's shock vote to leave the European Union poses a risk to growth for the rest of year
When measured from the income side, the economy grew at a 2.9% rate in first quarter and not the previously reported 2.2% pace, reflecting upward revisions to corporate profits. That was the quickest pace since the third quarter of 2014.
Economic growth in the first quarter was constrained by a strong dollar and sluggish global demand. Output was also hampered by businesses' efforts to reduce an inventory overhang, with a further drag coming from lower oil prices, which have sparked deep spending cuts on capital goods such as equipment.
Economists also believe the model used by the government to strip out seasonal patterns from data is not fully accomplishing its goal. The economy has underperformed in the first quarter in five of the last six years.
The government has acknowledged shortcomings with its seasonal adjustment model. The government early this month said beginning in mid-2018, it planned to produce estimates of GDP and its major components that are not seasonally adjusted.
