Washington (Reuters)-cooled economic growth in the first quarter as businesses cut back on investment and shelves restocked at slower, but the rise of the consumer spending more than a year cushioned the blow the biggest.
GDP expanded at an annual rate of 2 percent, the Commerce Department said Friday, the recession than 3 percent of the fourth quarter.
Economists expected an increase slightly, but the defense spending big drop by surprise. Still, growth was stronger than 1.5 percent or less at a rate analysts anticipated early in the quarter.
The growth rate remains too soft to offer comfort, President Barack Obama is asking for a second term, but not enough to change the stance appeared weak-see monetary policy to wait at Federal Reserve System.
"There is nothing happening, it is slow growing and just this and emphasizes that the economy is sound, but nothing more," said Stephen Baffico, General Manager-four tree capital partners in New York.
Government expenses dropped the sixth straight quarter outlining defense fell, the simplicity and the State authorities showed some signs of moving.
The rise in demand for vehicles, which is set to the largest spending since the fourth quarter of 2010, helped offset the drag from the consumers, Government and business, which dropped for the first time since the recession ended.
Another heartening sign, building a home rose the fastest pace since the second quarter of 2010 and, thanks to the unusually warm winter.
Economists said that while growth was weak but the Federation into the rotation of shopping was soft enough to bond to strengthen the Central Bank that interest rates should be kept near zero, at least until the end of 2014.
Fed Chairman Ben Bernanke on Wednesday expressed comfort with the current policy stance, although he held out the more likely to buy bond if the economy deteriorated.
"This report directly into the hands of those who want to play to keep prices low for a long time," said Joel Naroff, Chief Economist at Naroff Economic Advisors Netherlands, Pennsylvania.
Consumers take up slack
Shares on Wall Street has changed little in the report after earnings-driven rally in recent days. Prices for Treasury debt weakens against the dollar, while the weaker currencies.
Although the details were involved, the better the image suggested GDP report quarter IV when building inventory for almost two-thirds of the economy's growth.
Consumer spending, which makes up 70 percent of u.s. economic activity, increased by 2.9% in the first quarter after rising 1.3 percent in the final three months of last year.
Automakers reported that sales rose by the most in four years during the first quarter.
This part is stored on demand after last year's earthquake and the tsunami left showrooms, bereft of popular models in Japan.
Encourages growth, some in a household may replace old vehicles after tightening their belts during the recession of 2007-2009.
Motor vehicle production contributed to GDP growth percentage points to 1.12 in the first quarter, more than double the previous quarter, and the so-called durable goods such as cars rose 9.5 percent rate.
However, with the market showing signs of fatigue after an average of 246,000 per month employment growth from December to February, consumer spending in the second quarter could soften.
Technology is a bit different this month, a separate report showed. Thomson Reuters/University of Michigan final index on the global bmshibim read consumer inched up from 76.4 mountable chassis in March.
A moderate increase of inventories
Inventories contributed just over half a percentage point to GDP growth in the fourth quarter compared to 1.81 percentage points.
Excluding inventories, GDP rose at a rate of 1.6 percent. The fourth quarter, the figure was only 1.1 percent of their counterparts.
A rise in energy prices, inflation pressures as wide soared even measured GDP growth. Index for personal expenses increased at a rate of 2.4 percent, accelerating from the fourth quarter's 1.2% pace.
The core index, which removes food and energy costs at a rate of 2.1 percent, advanced also deny from 1.3% in the previous quarter.
(Reported by Mutikani Lucia; editing by Neil Stempleman)
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