First Quarter GDP Growth Revised Down to 3%

Washington, DC, May 27, 2010--Gross domestic product grew at a 3.0% pace in the first quarter -- lower than previously estimated, according to the Commerce Department.

The department last month originally reported that GDP expanded at a 3.2% clip in the first three months of 2010. The latest revision incorporates data that is not available for the first reading of GDP.

Economists expected first-quarter growth to be revised up to 3.5%.

Consumer spending, the largest contributor to GDP, grew at 3.5% annualized rate in the first quarter, down from the prior estimate of 3.6%. It accounted for 2.4 percentage points of overall growth.

The increase in business investment, meanwhile, was reduced to 3.1% from the original estimate of 4.1%.

Real disposable income was revised to a gain of 1.9% after the government originally reported no change in the first quarter. Yet the Commerce Department also said real disposable income in the fourth quarter was flat instead of rising 1% as initially stated.