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| Version 1 | Version 2 |
|---|---|
| US economy weakest in four years | US economy weakest in four years |
| (10 minutes later) | |
| The US economy grew at a pace of 0.6% in the first three months of 2007, its weakest rate in more than four years, official figures have shown. | The US economy grew at a pace of 0.6% in the first three months of 2007, its weakest rate in more than four years, official figures have shown. |
| Hit by Americans importing more goods and weakness in the US housing market, the figure was a downward revision on the initial 1.3% estimate. | Hit by Americans importing more goods and weakness in the US housing market, the figure was a downward revision on the initial 1.3% estimate. |
| The latest figure from the Commerce Department was also worse than market expectations of 0.8%. | The latest figure from the Commerce Department was also worse than market expectations of 0.8%. |
| It was the slowest rate of growth since the final three months of 2002. | It was the slowest rate of growth since the final three months of 2002. |
| Another significant factor for the weak showing was the downturn in the housing market, which posted a 15.4% reduction in new home building during the quarter. | Another significant factor for the weak showing was the downturn in the housing market, which posted a 15.4% reduction in new home building during the quarter. |
| However, consumer spending remained resilient, adding 4.4%. | However, consumer spending remained resilient, adding 4.4%. |
| And business investment was better than earlier estimates, growing 2.9%, revised up from 2%. | |
| 'Bounce back' | 'Bounce back' |
| "It looked like the market was starting to lean into the wind, anticipating a weak number, and we got a little sell-off when it did come in," said Michael Woolfolk, senior currency strategist at Bank of New York. | "It looked like the market was starting to lean into the wind, anticipating a weak number, and we got a little sell-off when it did come in," said Michael Woolfolk, senior currency strategist at Bank of New York. |
| "But it's quite obvious the economy bottomed in the first quarter and this leaves us with a better base from which to bounce back." | "But it's quite obvious the economy bottomed in the first quarter and this leaves us with a better base from which to bounce back." |
| Other analysts are also confident that the figures for April to June will be much better. | Other analysts are also confident that the figures for April to June will be much better. |
| "I think we'll see second-quarter growth above 3% and 2.5% for all of 2007," said Lehman Brothers senior economist Drew Matus. | "I think we'll see second-quarter growth above 3% and 2.5% for all of 2007," said Lehman Brothers senior economist Drew Matus. |
| Earlier this week, released minutes from the last Federal Reserve meeting showed that the central bank continues to see inflation as the "predominant concern" for the US economy. | |
| The Fed left interest rates unchanged at 5.25% at its last meeting on 9 May. | The Fed left interest rates unchanged at 5.25% at its last meeting on 9 May. |
| In its minutes, the Fed added that the housing market downturn had been more severe than expected, but that the risk of the US economy slowing abruptly had lessened. | In its minutes, the Fed added that the housing market downturn had been more severe than expected, but that the risk of the US economy slowing abruptly had lessened. |