Commerce Department Says Economy Grew Slower Than Previously Thought

The Commerce Department has recently said that the U.S. economic growth for the first three months of the year was slower than expected as companies cut their inventories at the fastest pace in 18 years, reported Reuters. Gross domestic product grew at a 1.3 percent annual rate in the first quarter, up from 1.0 percent for the final three months of 2000, but below the estimated growth rate of 2.0 percent. Consumer spending was down slightly to 2.9 percent from the previously reported rate of 3.1 percent. After-tax corporate profits dropped 3.1 percent in the quarter after a 4.3 percent fall the previous quarter, the second straight quarter that profits dropped for the first time since 1998. The price index for personal consumption expenditures rose at a 3.2 percent annual rate, down from the 3.3 percent pace released in the advanced report, however the fastest pace since the first quarter of 2000. Excluding food and energy, the index was up 2.6 percent reported Reuters.