That was better than the initially reported 0.5% rate.
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On Wall Street the S&P 500 gained 0.2 per cent. The dollar rose 0.6 per cent on the euro, to US$1.1129, and the yield on the one-year Treasury bill ticked up a notch to 0.66 per cent from 0.65 per cent.
Economists polled by Reuters had expected first-quarter GDP growth would be revised up to a 0.9 percent rate.
In the fourth quarter, GDP increased 1.4%.
Inventories subtracted 0.2 percent from GDP, a lower figure than the 0.3 percent subtraction estimated previously. Personal consumption accounts for about two-thirds of economic growth in any given quarter, so even the smallest fluctuations can bolster or drag down the country’s overall economic growth.
There are signs the economy regained momentum early in the second quarter, with retail sales, goods exports, industrial production, housing starts and home sales surging in April. That was later bumped up to 1.4 percent.
“This weakness in profits is likely contributing to the recent pullback in business spending and hiring growth”, J.P. Morgan Chase economist Daniel Silver said.
A weak global economy, strong dollar and the oil industry’s downturn have suppressed exports and business investment for almost two years.
Halfway through the second quarter, private and public growth estimates were that the economy has rebounded to a 2.5-3.0 per cent annual pace. This year may be no exception.
Residual seasonality has plagued first-quarter GDP data, with growth underperforming in five of the last six years since the beginning of the economic recovery in 2009.
A sore spot has been weak capital expenditures by US businesses.
Investment in nonresidential structures dropped at an 8.9percent pace in the first quarter instead of the previously reported 10.7 percent rate. Gross domestic fixed investment – which is generally interpreted to represent either residential or corporate spending on facilities and equipment, in many cases to enhance company productivity – was slightly less negative than previously estimated.
But the core of the economy – namely, consumer spending – didn’t see any kind of noteworthy adjustments, suggesting the first quarter’s final GDP estimate won’t be markedly different than what was released on Friday.
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Minutes from the Fed’s April 26-27 policy meeting, published last week, showed most of its policymakers considered it appropriate to raise rates in June if data continued to point to an improvement in second-quarter growth. So better exports and fewer imports combined help shrink America’s trade gap and support economic growth metrics. But it has also been the slowest, averaging modest annual growth of 2.1 percent.
