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First-quarter economic growth revised down to weak 1.8%

June 26, 2013|By Jim Puzzanghera
  • The MSC Angela container ship sits docked at the Port of Oakland.
The MSC Angela container ship sits docked at the Port of Oakland. (David Paul Morris / Bloomberg )

WASHINGTON -- The U.S. economy struggled even more than originally thought in the first three months of the year, growing at an anemic 1.8% annual rate, the Commerce Department said Wednesday.

The growth rate has been revised down twice after the initial reading of 2.5% growth in the first quarter.

Growth is widely expected to pick up in the second quarter as consumers and businesses adjust to tax hikes and federal spending cuts this year.

QUIZ: How much do you know about the federal budget cuts?

The 1.8% rate was an improvement over the 0.4% rate in the fourth quarter of last year, but well short of what's needed to bring the still-high unemployment rate down significantly.

The drop from the earlier estimates was driven largely by less consumer spending than initially calculated.

In its May estimate of economic growth, the Commerce Department said consumer spending was up 3.4% in the first quarter. On Wednesday, that figure was revised down to 2.6%.

Business investment also was down sharply. It increased 0.4% in the first quarter, down from an earlier estimate of a 2.2% increase.


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