US growth below forecast for the first three months
The US economy is looking slightly weaker before a critical report on May job growth today.
Economic growth was a little slower in the first three months of the year than first estimated, largely because government and consumers spent less and businesses restocked their supplies more slowly.
The number of people who applied for unemployment benefits rose to a five-week high last week. And a survey of private companies showed only modest hiring gains last month.
Still, a softer job market hasn't caused Americans to scale back spending. Consumers spent more at retail stores in May than the same month last year, buying more clothes and Mother's Day gifts.
The mostly disappointing data sent stocks lower but they recovered later. The yield on the 10-year Treasury note sank to 1.57pc, a 66-year low.
The data showed that:
• The economy grew at an annual rate of 1.9pc in the first three months of the year, the Commerce Department said in its second estimate of January-March growth. That is lower than its initial estimate of 2.2pc.
• Weekly applications for unemployment aid rose 10,000 to a seasonally adjusted 383,000, the Labour Department said.
• Private businesses added 133,000 jobs last month, according to a survey by payroll provider ADP. That figure disappointed most economists, who had hoped to see job growth accelerate after ADP's survey found that just 113,000 jobs were added in April.
Peter Newland, an economist at Barclays Research, said he was discouraged by the slowdown in first-quarter growth.
"This report does little to change the perception of an economy ticking along at a moderate pace but failing to break out into a full-on recovery with consistently above-potential growth," Mr Newland said.
When the US government issues its report today on May employment, economists expect it to say that employers added 158,000 jobs. That would be better than in the past two months but far below the winter's pace of 252,000 jobs per month.