The US economy grew at a much slower pace in the first quarter

Washington, DC
CNN
 — 

The US economy slowed to an annualized and seasonally adjusted rate of 1.1% in the first quarter of this year, according to GDP data released Thursday by the Department of Commerce.

That falls below economists’ expectations of 2% and marks a much slower pace compared to the previous two quarters, as rising interest rates and high inflation weighed on consumers and businesses.

Consumer spending, which accounts for more than two-thirds of economic output, contributed the most to the first quarter’s growth as Americans spent robustly on both goods and services. Spending was stronger compared with the previous quarter, led by purchases of cars and vehicle parts and spending on healthcare services.

However, business spending fell in the beginning of the year as firms spent less on equipment.

This story is developing and will be updated.