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The US economy grew by less than previously estimated in the first quarter of the year, the Commerce Department has said.
Gross domestic product - which measures annual economic output - grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise.
Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision.
In the final quarter of 2012, the annualised growth rate had been 0.4%.
The revised figure surprised analysts, who had expected it to remain unchanged at 2.4%.
A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%.
Tax impact
Exports, which were previously reported as having risen, actually shrank by 1.1%, due to the weak global economy. Imports also contracted by 0.4%.
Tax increases introduced in January and concerns about government spending cuts are thought to have forced households and businesses to delay spending and investment.
An increase in the Social Security taxes has reduced income for most Americans. A person earning $50,000 to $75,000 a year has about $1,000 less to spend, while a household with two high earners will have roughly $4,500 less.
Analysts said the revised figures could alter the US Federal Reserve's intention to slow down its $85bn-a-month bond purchases, which was based on its anticipation that the economy will strengthen.
"If we end up with three consecutive quarters of sub-2% growth, the Fed won't taper under those conditions. They need convincing signs of a pick-up before they turn the taps," said Jennifer Lee, senior economist at BMO Capital Markets.
source: BBC News - US growth rate revised down to 1.8%
Gross domestic product - which measures annual economic output - grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise.
Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision.
In the final quarter of 2012, the annualised growth rate had been 0.4%.
The revised figure surprised analysts, who had expected it to remain unchanged at 2.4%.
A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%.
Tax impact
Exports, which were previously reported as having risen, actually shrank by 1.1%, due to the weak global economy. Imports also contracted by 0.4%.
Tax increases introduced in January and concerns about government spending cuts are thought to have forced households and businesses to delay spending and investment.
An increase in the Social Security taxes has reduced income for most Americans. A person earning $50,000 to $75,000 a year has about $1,000 less to spend, while a household with two high earners will have roughly $4,500 less.
Analysts said the revised figures could alter the US Federal Reserve's intention to slow down its $85bn-a-month bond purchases, which was based on its anticipation that the economy will strengthen.
"If we end up with three consecutive quarters of sub-2% growth, the Fed won't taper under those conditions. They need convincing signs of a pick-up before they turn the taps," said Jennifer Lee, senior economist at BMO Capital Markets.
source: BBC News - US growth rate revised down to 1.8%
