WASHINGTON — The U.S. economy grew at an annual rate of 1.9 percent in the first three months of the year, slower than first estimated.
The Commerce Department on Thursday lowered its estimate for January-March growth from an initial estimate of 2.2 percent. The downward revision was largely because consumers spent less than first estimated, business restocked more slowly and the U.S. trade deficit grew sharply.
Analysts believe the economy is growing at a slightly faster rate this spring. They estimate growth at an annual rate of between 2 percent and 2.5 percent in the April-June quarter. Many expect the economy will maintain that pace for all of 2012, an improvement from last year’s 1.7 percent growth.
Still, growth of 2.5 percent is typically enough just to keep pace with population changes. Most economists say it takes almost twice as much growth to lower the unemployment rate by 1 percentage point over a year.
The number of Americans seeking unemployment benefits rose last week to a five-week high, evidence that the job market remains sluggish.
The Labor Department says weekly applications for unemployment aid rose 10,000 to a seasonally adjusted 383,000. The four-week average, a less volatile measure, increased for the first time in a month to 374,500.
The numbers are bad news for President Barack Obama, for whom the economy is the top issue before the November election.
The government reports Friday on May job growth. Economists expect 158,000 jobs created, slightly better than the past two months but far below the winter’s pace. They also expect no change in the unemployment rate
The government offers three estimates for gross domestic product. GDP is the output of all goods and services, which includes everything from haircuts and coffee to airplanes and appliances.
A rising trade deficit slows growth because the country is spending more on foreign-made products than it is taking in from sales of U.S.-made goods. Less restocking means companies ordered fewer goods, which decreases factory production and weighs on growth.
Economists expect growth to pick up slightly because of steady job growth and lower gas prices. Both allow consumers to spend more freely. Consumer spending drives 70 percent of economic activity.