The U.S. economy expanded in the first quarter but failed to gather as much steam as expected, raising concerns of another year of sluggish growth, s, the Commerce Department said Friday.
The first estimate of GDP growth in the first quarter was a solid rebound from the previous quarter's poor 0.4 percent pace, but it came in below the average analyst forecast of 2.8 percent.
"It wasn't the bang-up start to the year we had hoped for, and the signals from March suggested that we will only decelerate from here," said Avery Shenfeld, chief economist at CIBC World Markets Economics in Toronto, according to Reuters.
Much of the gain reflected a jump in consumer spending, which rose at an annual rate of 3.2 percent. That's the best since the end of 2010. Businesses responded to the greater demand by rebuilding to their stockpiles. And home construction rose further.
But government spending fell, led by another deep cut in federal defense spending.