WASHINGTON (AP) – The U.S. economy expanded at a sluggish 1.1 percent pace this spring as businesses sharply reduced their stockpiles of goods and spent less on new buildings and equipment. Yet most analysts forecast much faster growth in the summer and fall, fueled by healthy consumer spending.
Friday’s estimate is slightly below the Commerce Department’s previous figure of 1.2 percent growth as measured by gross domestic product, the broadest gauge of the economy.
Consumers offset the corporate cutbacks in the April-June quarter by spending at the fastest pace in six quarters, Commerce said Friday. That suggests steady job growth and modest pay gains are making Americans more confident and willing to spend.
“The very slight downward revision … isn’t too concerning, especially given that the more recent data point to a strong rebound in the third quarter,” Steve Murphy, an economist at forecasting firm Capital Economics, said in a research note.
The Federal Reserve Bank of Atlanta currently forecasts growth will jump to a 3.4 percent annual pace in the July-September quarter.