The U.S. economy contracted slightly in the first quarter as it struggled with bad weather, a strong dollar, spending cuts in the energy sector and disruptions at West Coast ports.
There are signs, however, that growth is accelerating in the second quarter as the temporary drag from unusually heavy snowfalls and the ports dispute fade. Retailers reported strong sales in May and employers stepped up hiring. Housing is also firming.
The U.S. Commerce Department said on Wednesday gross domestic product fell at a 0.2% annual rate in the January-March quarter instead of the 0.7% pace of contraction it reported last month.
A fairly stronger pace of consumer spending than previously estimated accounted for much of the upward revision. Consumer spending, which accounts for more than two thirds of U.S. economic activity, was revised up to 2.1% growth pace from the 1.8% rate reported last month.
With personal savings increasing at a robust $720.2-billion U.S. pace, consumer spending could accelerate in the second quarter.
While export growth was revised higher, that was offset by an upward revision to imports, leaving a still-large deficit that subtracted almost two percentage points from GDP.
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