Q1 Economic Growth Revised Down to Under 1 percent

The Commerce Department today released its revisions for U.S. economic growth in the first quarter of 2007, and the update was not pretty.

Officially, gross domestic product in the U.S. grew at a 0.6% rate from January to March of this year.  This measure comes after GDP growth was initially estimated at 1.3% last month.  The 0.6% economic growth rate marks the lowest in five years.

The revision did not exactly take analysts and economists by surprise.  According to MarketWatch and Reuters, those in the know had been expecting a revised number of around 0.7%.

When combined with the three previous quarters’ numbers, the economy has grown just 1.9% in the past year.  Healthy long-term growth is generally considered to be in the range of 3%.

The lags on the economy in the first part of this are aren’t exactly shocking: much lower investments in houses and declining inventories at U.S. companies – primarily homebuilders as they try to get rid of already-built domiciles.  American consumer spending continues to be the leading positive input in the GDP.