The nation’s gross domestic product, the output of goods and services produced within the U.S., grew at a rate of 1.8 percent in the first quarter of this year, according to the Commerce Department’s Bureau of Economic Analysis. That’s a downward revision from the 2.4 percent rate previously reported.
USA Today points out that “the biggest change was a cut in the government’s estimate of consumer spending growth, which dropped to 2.6% from 3.4% growth.”
People spent less on services such as personal care, travel and legal services, according to Bloomberg.
Consumers took a big hit in the pocketbook as of Jan. 1: That’s when a 2 percent increase in the payroll tax took effect, and people appear to have spent less after that. As CNN Money notes, consumer spending makes up about two-thirds of the economic activity in the GDP, so the figure is closely watched.
The Commerce Department regularly revises its GDP figures, and the first-quarter revision released today is the third one this year.