GDP Revised Higher, Commercial Construction Bright

Washington, DC, May 29, 2008--The economy grew at a slow 0.9 percent pace in the first quarter, better than initially expected.

However, the number for gross domestic product still shows that consumers and businesses are cautious in light of problems in the housing and credit markets, and other financial problems.

The initial reading was 0.6 percent.

Gross domestic product, or GDP, measures the value of all goods and services produced within the United States.

The first-quarter performance matched analysts' forecasts and offered an encouraging sign because it showed the economy was still growing at that time.

Builders cut spending on housing projects by 25.5 percent, on an annualized basis, in the first quarter, the most in 27 years.

Consumers increased spending at just a 1 percent pace in the first quarter. That was the slowest since the last recession in 2001.

Businesses also showed some caution, cutting spending on equipment and software. However, investment in commercial construction wasn't as weak as the government first estimated, contributing to the upward revision to first-quarter GDP.

One of the bright spots was export at an annual 2.8 percent pace. Although that was not nearly as much as first estimated, exports still were a force for GDP growth.