Investing.com - The U.S. economy grew slightly less than initially reported in the first quarter, according to data released on Wednesday.
Gross domestic product expanded at a 2.2% annual rate in the first three months of 2018, instead of the previously reported 2.3% pace, the Commerce Department said in its second GDP estimate.
That was a deceleration from the fourth quarter's brisk 2.9% pace.
Consumer spending was revised down to 1.0% from 1.1% initially, acting as a drag on growth.
Exports were also revised down to 4.2% from 4.8% while imports were revised slightly higher, to 2.8% from 2.6% in the initial estimate.
Despite the slowdown, the U.S. economy is currently in its second longest economic expansion since World War II.
The first quarter data is unlikely to have much of an impact on the Federal Reserve plans for gradual tightening given the expected boost over the coming months from the Trump administration tax cuts which took effect in January.
Minutes of the Fed’s May meeting published earlier this month showed that policymakers forecast the expansion to “pick up in the second quarter and to outpace potential output growth through 2020”.
Policymakers expected that the moderation in the growth of consumer spending early in the year would prove temporary and noted “a number of economic fundamentals were currently supporting continued above-trend economic growth; these included a strong labor market, federal tax and spending policies, high levels of household and business confidence, favorable financial conditions, and strong economic growth abroad.”
The Fed funds futures market currently implies that there is a 82.5% chance of the central bank lifting interest rates next month, according to Investing.com’s Fed Rate Monitor Tool, and investors are pricing an additional rate hike before the end of the year.
The third estimate for first quarter GDP will be released on June 28, while preliminary data for the second quarter is due on July 27.