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US Economy Slowing Down

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US economic growth slowed to an annualised pace of 2.2% in the first quarter of the year, from 3% in the final three months of last year.

The figure was below economists' estimates of 2.5% and is equivalent to quarter-on-quarter growth of 0.5%.

The US Commerce Department said businesses had cut back on investment, depressing gross domestic product (GDP).

However, a pick-up in the car market supported the growth figure.

Although the headline figure was weaker than had been hoped for, a key driving force in the fourth quarter had been stockpiling by US firms.

This time, demand from consumers was stronger.

Consumer spending, which accounts for about 70% of the US economy, grew by a 2.9% annual rate, the fastest pace since the fourth quarter of 2010.

Motor vehicle sales rose at 2.1% in the fourth quarter, the fastest rate in four years.

Home construction rose at its fastest pace since the second quarter of 2010, boosted by the warmer weather.

There was worse news on business spending, which fell for the first time since the fourth quarter of 2009 and government spending, particularly defence spending, fell back too.

It dropped by 2.1%, a sharp about turn from growth of 5.2% in the fourth quarter.

Read more at the BBC...

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