28 Apr 2012

US economic growth slows

5:38 am on 28 April 2012

Economic growth in the United States slowed in the first quarter of this year. The economy expanded at an annual rate of 2.2% compared with 3% in the final quarter of last year.

The Commerce Department said businesses had reduced investment, depressing gross domestic product. However, there was a pick-up in the car market.

Consumer spending, which accounts for about 70% of the US economy, grew by a 2.9% annual rate, the fastest pace since the fourth quarter of 2010.

Motor vehicle sales rose at 2.1% in the fourth quarter, the fastest rate in four years.

Home construction rose at its fastest pace since the second quarter of 2010.

Business spending fell for the first time since the fourth quarter of 2009. Government spending, particularly defence, fell by 2.1%, a sharp about turn from growth of 5.2% in the fourth quarter.

Investment in equipment and software rose at its slowest pace since the recession ended.