That’s how much gross domestic product expanded in the first quarter at an annualized rate, according to revised figures from the Commerce Department.
First-quarter GDP was revised downward from a previous estimate of 2.4 percent, according to a report released yesterday. Household spending, which accounts for about 70 percent of the economy, rose by 2.6 percent, down from the previous estimate of 3.4 percent.
“Households cut back on travel, legal services and personal care expenditures and also curbed spending on health care as the two percentage-point increase in the payroll tax caused incomes to drop by the most in more than four years,” Bloomberg’s Shobhana Chandra reported. “A housing rebound and improving job market will probably help revive purchases in the second half of the year, one reason economists project the economy can withstand the automatic government budget cuts.”
The economy has expanded for 15 consecutive quarters beginning in the third quarter of 2009.