US GDP revised slightly lower as austerity bites

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US GDP revised slightly lower as austerity bites

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Economic growth in the United States was slightly weaker than originally thought in the first three months of the year.

Revised figures from the Commerce Department show GDP was up by 2.4 percent. The initial estimate was 2.5 percent.

Consumer spending rose, but businesses stocked their shelves at a slower pace and austerity moves by national, state and local government, meant an almost five percent drop in their spending.

Still the Federal Reserve’s low interest rate policies and stimulus have kept economic growth surprisingly resilient.

Fed Chairman Ben Bernanke just told the US Congress the central bank would keep that up until policy makers see signs that a sustainable recovery is taking hold.

Still Washington’s austerity drive is having an effect and most economists expect growth will slow in coming months as further government budget cuts come into effect.