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Final Reading on First-Quarter Growth Is 1.4%

The number comes down on lower inventory investment and higher imports.

GDP growth for the first quarter was revised down a half percentage-point to 1.4%, the Commerce Department said, reflecting lower inventory investment and higher imports than previously thought.

Economists had estimated a gain of 1.9% for the first quarter, according to consensus estimates. GDP increased 1.4% in the fourth quarter of last year as well. As in the preliminary forecast, consumer spending and residential investment were the main contributors to growth.

Consumer spending advanced 2% in the first quarter, compared with an increase of 1.7% in the fourth. Residential investment was 10.1%, versus 9.4% in the previous quarter.

Inventories grew at a $4.8 billion rate, much less than the $13.2 billion forecast last month, however.

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Equipment and software spending decreased 4.8%, in contrast to an increase of 6.2% in the fourth quarter. Overall, businesses reduced spending by 4.4% after raising it by 2.3% in the fourth quarter.

Final sales to domestic purchases rose 1.4% in the first quarter, consistent with previous estimates.

In a separate report, the Labor Department said first-time claims for unemployment benefits fell to a 12-week low of 404,000 in the week ending June 21, compared to 426,000 in the previous week. The four-week moving average, which adjusts for volatility, was 428,250, its lowest level in almost a month.