First-quarter economic growth in the United States has been revised up to 1.3% as businesses scaled back on investments and lowered their inventories.
The U.S. Commerce Department had previously estimated that the economy grew at a 1.1% annual rate during Q1 of this year.
The revised measure of gross domestic product (GDP) shows a steady decline from annualized growth of 3.2% in the third quarter of 2022 and 2.6% growth in the fourth quarter of last year.
Despite the first-quarter slowdown, consumer spending in the U.S., which accounts for about 70% of America's economic output, rose at a 3.8% annual rate, the most in two years.
Consumer spending on physical goods such as appliances and cars rose 6.3% in Q1, the fastest pace in a year.
The decline in economic growth comes after the U.S. Federal Reserve raised interest rates 10 times in the past 14 months.
The interest rate hikes have increased the costs of car loans, mortgages, credit cards and business loans.
With mortgage rates having doubled in many parts of the U.S., investment in housing declined 0.2% in Q1. In April, sales of existing homes were 23% lower than their level a year ago.
The latest reading showed that inflation was at 4.9% in April from a year earlier, still more than double the U.S. central bank’s 2% target.
The current economic slowdown is widely expected to lead to a recession in the U.S. later this year. Europe's largest economy, Germany, has already entered a technical recession.
