(Bloomberg)- The U.S. economy increased less than estimated in the first quarter, reproducing less spending on services by consumers.
Gross domestic product extended at a reviewed 1.8% on a yearly rate from January through March, down as of a previous estimation of 2.4%, records from the Commerce Department presented today in Washington. Household purchases, which account for around 70% of the economy, were reviewed to a 2.6% progress in comparison with the 3.4% gains projected last month.
Cut back on travel by Households, personal care and legal services outflows and also controlled expenses on health care as the 2% point rise in the payroll tax triggered incomes to decline by the most in over four years. A rebound in housing and developing job market will perhaps help come around purchases in the second half of the year; one purpose economists plan the economy can survive the automatic government budget cuts.
The New York-based chief economist for UBS Securities LLC, who estimated a 2.1% progress in GDP, Maury Harris said “We just got off to a slower start than expected,” and he added “The second half will be better,” because banks made it easier to borrow.
Stocks increased, moving the Standard & Poor’s 500 Index higher for two straight days as China’s cash crunch reduced. The S&P 500 increased 0.7% to reach 1,599.81 at 10:15 a.m. In New York. The yield on the benchmark 10-year note dropped to 2.53% as of 2.61% overnight yesterday.