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| Version 1 | Version 2 |
|---|---|
| US growth rate revised down to 1.8% | US growth rate revised down to 1.8% |
| (35 minutes later) | |
| The US economy grew by less than previously estimated in the first quarter of the year, the Commerce Department has said. | The US economy grew by less than previously estimated in the first quarter of the year, the Commerce Department has said. |
| Gross domestic product - which measures annual economic output - grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise. | Gross domestic product - which measures annual economic output - grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise. |
| Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision. | Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision. |
| In the final quarter of 2012, the annualised growth rate had been 0.4%. | In the final quarter of 2012, the annualised growth rate had been 0.4%. |
| The revised figure surprised analysts, who had expected it to remain unchanged at 2.4%. | The revised figure surprised analysts, who had expected it to remain unchanged at 2.4%. |
| A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%. | A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%. |
| Tax impact | |
| Exports, which were previously reported as having risen, actually shrank by 1.1%, due to the weak global economy. Imports also contracted by 0.4%. | Exports, which were previously reported as having risen, actually shrank by 1.1%, due to the weak global economy. Imports also contracted by 0.4%. |
| Tax increases introduced in January and concerns about government spending cuts are thought to have forced households and businesses to delay spending and investment. | |
| An increase in the Social Security taxes has reduced income for most Americans. A person earning $50,000 to $75,000 a year has about $1,000 less to spend, while a household with two high earners will have roughly $4,500 less. | |
| Analysts said the revised figures could alter the US Federal Reserve's intention to slow down its $85bn-a-month bond purchases, which was based on its anticipation that the economy will strengthen. | |
| "If we end up with three consecutive quarters of sub-2% growth, the Fed won't taper under those conditions. They need convincing signs of a pick-up before they turn the taps," said Jennifer Lee, senior economist at BMO Capital Markets. |