US economy expands at a slow 1.9%

The US economy grew at a slower than expected pace at 1.9 per cent in the first three months of 2012, primarily hit by lower private sector investments.

Official data released on Thursday showed that the American economy expanded just 1.9 per cent in the March quarter, lower than the previous estimate of 2.2 per cent for the period.

The slow growth of the world’s largest economy comes at a time when European debt turmoil is impacting global financial markets and most of the economies worldwide.

‘Real gross domestic product - the output of goods and services produced by labour and property located in the US - increased at an annual rate of 1.9 per cent in the first quarter of 2012,’ according to the second GDP estimate released by the US Bureau of Economic Analysis.

The latest figure is based on more complete data than were available for the advance estimate issued last month.

In the last three months of 2011, the economy had expanded 3 per cent.

The decline in 2012 March quarter growth was on account of deceleration in private inventory investment and fall in non-residential fixed investment, among others, it said.

However, consumer spending rose 2.7 per cent in the first three months of 2012 compared to 2.1 per cent in the 2011 December quarter.

In the latest March quarter, the American economy was worth $15.45 trillion.