Slower Than Expected Growth Signals Weakness
Economic growth regained speed in the first quarter, but not as much as expected, heightening fears an already weakening economy could struggle to cope with deep government spending cuts and higher taxes.
Gross domestic product expanded at a 2.5 percent annual rate, the Commerce Department said on Friday, after growth nearly stalled at 0.4 percent in the fourth quarter. Economists had expected a 3.0 percent growth pace.
"It wasn't the bang-up start to the year we had hoped for, and the signals from March suggested that we will only decelerate from here," said Avery Shenfeld, chief economist at CIBC World Markets Economics in Toronto.