The U.S. economy contracted by a revised 0.2% in the first quarter, a smaller decline than previously reported that mainly reflects higher consumer spending and a lower drop in exports. Economists polled by MarketWatch had expected the decline in GDP to be revised to 0.2% from a prior 0.7% estimate. The increase in consumer spending, the main engine of U.S. growth, was revised to 2.1% from 1.8%, reflecting higher spending on eating out, takeout and "transportation services." Overall private sector investment also rose a bit more, up 2.4% vs. a prior 0.7% estimate, owing to stronger spending on home construction and inventories. The value of inventories, which adds to GDP, increased by $99.5 billion instead of $95 billion. Exports fell a smaller 5.9% instead of 7.6%, while imports rose a faster 7.1% vs. a previous 5.6% reading. Inflation as measured by the PCE price index fell at a 2% annual rate, but the core rate that excludes food and energy was up 0.8% in the same span.
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