WASHINGTON, May 29: The US economy plodded ahead at a 1.9 per cent growth rate in the first quarter of 2003, the Commerce Department said on Thursday, revising upward its preliminary 1.6 per cent growth estimate.
The tepid pace in the January-March period for gross domestic product (GDP) reflected only a marginal improvement from the 1.4 per cent rate of the fourth quarter of 2002.
The slightly faster pace of growth in the first quarter was roughly in line with the consensus forecast of Wall Street economists.
Independent economist Joel Naroff said the first-quarter figures were affected by the run-up to the war in Iraq, but illustrate that this did not cause the economy to collapse as some had predicted.
“Even during the quarter that we expected households to be the most conservative, we still got some modest growth,” Naroff said.
“Now that we’re past those uncertainties, we should expect growth to improve from that level.
“We never got a double-dip (recession), the economy held up... This doesn’t tell us where we’re going from here, but we have a base from which to grow.”
Consumers remained the key force in keeping the economy growing, with business investment faltering, the report showed. Consumer spending rose at a revised 2.0 per cent rate in the first quarter, up from the initial estimate of a 1.4pc gain.
In addition to a higher estimate of consumer spending, there was also an increase in the estimate of US exports, but a downward revision to equipment and software and an upward revision to imports.
The inflation picture remained relatively unchanged in the revised GDP data. The chain-weighted price index linked to GDP showed a 2.5pc increase, unchanged from the prior estimate.
By one measure closely watched by economists, known as final sales — GDP growth minus inventory adjustments — the economy grew at a 2.4 per cent rate in the first quarter, up from the previous estimate of a 2.1 per cent gain.
The report also showed that after-tax corporate profits rose 2.5 per cent in the first quarter, down from a 4.1 per cent increase in the fourth quarter of 2002.
Exports fell at a revised 1.4 per cent rate in the first quarter, up from the initial estimate of a 3.2 per cent fall.
Imports were also revised higher, but by less than exports. Imports fell at a revised 7.1 per cent rate in the first quarter, up from the initial estimate of a 7.9 per cent fall.
Partially offsetting these positive contributions, business investment was weaker in
the first quarter than first estimated.—AFP
