The US economy grew more vigorously in the first quarter than first thought, expanding at a 3.5 per cent annual rate.
Previously, the Commerce Department estimated that gross domestic product, or GDP, which measures total goods and services production within US borders, had grown at a 3.1 per cent annual rate in the three months from January through March - at the time the slowest advance in GDP in two years.
The upwardly revised growth still represents a modest slowing from the fourth quarter's 3.8 per cent pace and was slightly below Wall Street economists' forecasts for a 3.6 per cent rate.
Growth in spending by both consumers and businesses weakened from fourth-quarter rates. Imports increased at a 9.1 per cent annual rate in the first quarter instead of 14.7 per cent as Commerce estimated last month. That benefits GDP because imports subtract from the calculation of national output.
But some of the benefit from slower import growth was lost because inventories - which are a positive for GDP - grew at a $68.4-billion annual rate rather than $80.2 billion, still well ahead of the fourth quarter's $47.2-billion pace.
The latest GDP data buttressed Federal Reserve policy-makers' estimate that any economic "soft patch" in the early part of the year might be misleading.
In minutes from its May 3rd Federal Open Market Committee meeting, which were released earlier this week and that implied the US central bank will keep raising interest rates, the Fed said a slowdown in growth likely would be "transitory."
The Fed's focus in moving credit costs higher during the past year has been on the potential threat from mounting price pressures. The revised GDP report showed a price gauge favoured by Fed Chairman Alan Greenspan - personal consumption expenditures excluding food and energy - increased at a 2.2 per cent annual rate in the first quarter, the same as estimated last month, following a 1.7 per cent rate of advance in the fourth quarter.