By Jeffry Bartash
WASHINGTON (MarketWatch) - The U.S. economy grew a lot slower in the first quarter than previously believed, mainly because of less consumer spending on services and weaker business investment. Gross domestic product rose by 1.8% in the January-to-March period, down from a prior estimate of 2.4%, the Commerce Department said Wednesday in the last of three regular updates. Economists polled by MarketWatch had expected growth to remain unchanged at 2.4%. The increase in consumer spending - the main engine of the U.S. economy - was lowered to 2.6% from 3.4%. Americans did not spend as much on services such as health care and legal advice, the government said. Outlays for services were reduced to a 1.7% increase from 3.1%. Investment in business structures such as office buildings and plants also fell a steeper 8.3% instead of 3.5% as previously reported. Meanwhile, exports were revised to show a 1.1% decline and not a 0.8% gain, while imports actually fell 0.4% instead of rising 1.9%. The biggest bright spot: residential investment jumped 14% in the first quarter, up from a prior read of 12.1%. That's further evidence of a housing market gaining momentum. Most other figures in the GDP report were little changed.
