US economy grew 2.4 percent in first quarter

WASHINGTON (AP) — The U.S. economy grew at a modest 2.4 percent annual rate from January through March, slightly slower than initially estimated. Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.

The Commerce Department said today that economic growth in the first quarter was only marginally below the 2.5 percent rate estimated last month. That's still much faster than the 0.4 percent growth during the October-December quarter.

Economists believe growth is slowing to around a 2 percent rate in the April-June quarter, as the economy adjusts to federal spending cuts, higher taxes and further global weakness. Still, many say the decline may not be as severe as once thought. That's because solid hiring, surging home prices and record stock gains should keep consumers spending.

Jennifer Lee, senior economist at BMO Capital Markets, said that the small revision to first-quarter growth supported her view that the economy will grow a moderate 2.2 percent for the year, the same as last year.