Slower pace of growth in US

THE US economy grew at a slower pace in the first three months of the year than previously estimated, according to the Commerce Department’s second reading.

Growth in the world’s largest economy was revised down to an annualised three per cent from an initial estimate of 3.2 per cent. Analysts on average had expected GDP to be boosted to 3.4 per cent.

The downward revision was caused by a slackening of businesses investment and a reduction in government spending. Consumption spending remained resilient.

But analysts remained generally upbeat, with Capital Economics’ Paul Ashworth calling the revision trivial. He said: “The second quarter is shaping up to be more of the same. We expect to see another double-digit rise in business spending on capital equipment and consumption growth should come in close to the 3.5 per cent pace recorded in the first quarter.”

US markets shrugged off the weaker GDP data and instead rose sharply at the open after Beijing denied it was reviewing its holdings in Eurozone sovereign bonds due to the region’s debt crisis.