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US growth slows to 2.2 percent in first quarter
Posted: Apr 27, 2012 9:24 AM by Associated Press, MN
Updated: Apr 27, 2012 9:24 AM
WASHINGTON (AP) - Economists say the Federal Reserve may have to rethink its forecasts and its policies, after today's news that the economy grew more slowly in the first three months of the year.
The Fed predicted Wednesday that the economy could grow at nearly 3 percent this year -- but after a growth rate of 2.2 percent in the first quarter, it has some catching up to do.
One economist thinks the Fed is now more likely to pursue a third round of bond purchases to push down long-term interest rates.
Stronger consumer spending in the first three months of the year was offset by cutbacks in government spending and by businesses restocking their shelves at a slower pace. Consumers spent at the fastest pace in more than a year.
In 2011, the economy grew just 1.7 percent.
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