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U.S. Q1 GDP revised to 0.2 percent contraction

Xinhua, June 24, 2015 Adjust font size:

The contraction of the U.S. economy in the first quarter was less severe than previously estimated, the latest data from the U.S. Commerce Department showed on Wednesday.

U.S. real gross domestic product (GDP) decreased at an annual rate of 0.2 percent in the first quarter this year, according to the Commerce Department's final estimate.

The revision showed exports decreased less than previously estimated, while personal consumption expenditures (PCE) were stronger.

Due to strong dollar, exports decreased 5.9 percent in the first quarter, in contrast to an increase of 4.7 percent in the fourth quarter last year. But the drop was less than the previous estimate of a decrease of 7.6 percent.

Consumer spending, which accounts for about 70 percent of the U.S. economy, increased 2.1 percent in the first quarter, higher than the previous estimate of 1.8 percent.

Although the growth was lower than the 4.4 percent increase of the fourth quarter last year, the upward revision suggested consumers have the ability to drive the economy in the rest of this year.

Many Federal Reserve officials and economists hold that the household spending will pick up growth pace for the rest of this year, supported by the restored health of household balance sheets, improved household income prospects and the benefit of lower energy prices. Endi