U.S. economic growth was slightly less terrible in first quarter

WASHINGTON - Although the U.S. economy slowed to a crawl in the first three months of 2017, it was moving a little faster than originally thought. 

The government revised up its January-March growth reading to a rate of 1.2 percent, better than an earlier estimate of 0.7 percent.

The Commerce Department said gross domestic product, the broadest measure of economic health, fell in the first quarter, from 2.1 percent growth in the previous quarter, and marked the weakest result in a year.

The upgrade to an annual rate of 1.2 percent reflected new-found strength in consumer spending, business investment, and state and local government spending. Many forecasters expect growth to rebound in the second quarter.

"Consumer spending continues to expand with job and wage gains, and business investment is picking up, especially for energy-related industries," said Gus Faucher, chief economist for PNC Financial Services, in a note. "Housing is also contributing to growth. And inventory investment should bounce back, providing a boost."

Despite this momentum, the economy is expected to fall short of President Donald Trump's ambitious target for the year of 3 percent growth. Many forecasters project growth of just over 2 percent. 

The White House's plan for boosting economic activity hinges on large tax cuts and spending to rebuild America's aging infrastructure. 

Since 1950, annual GDP has risen an average of 3.1 percent. In recent years, a combination of slower productivity, tepid business investment and modest consumer demand has kept a lid on growth.