US economic growth slows to 2.2 pct in first quarter of 2012

Washington, Apr 28 (ANI): The pace of economic growth in the United States has slowed down to 2.2 percent in the first quarter of this year, as compared to three percent in last three months of 2011.

The figure is below economists' growth estimate of 2.5 percent and are a setback to President Barack Obama, whose re-election chances in November are tied to economic factors, the BBC reports.

The US Commerce Department said that businesses have cut down on investment, depressing the gross domestic product (GDP).

However, sale in cars rose at 2.1 percent in the fourth quarter, the fastest rate in four years, which has supported the growth figure.

Consumer spending, which accounts for about 70 percent of the US economy, grew by 2.9 percent annual rate, the fastest pace since the fourth quarter of 2010.

Paul Ashworth, chief UK economist at Capital Economics, said that the main reason for the lower-than-expected figure was to a fall in defence spending.

Defence spending fell by 8.1 percent, after dropping by 12.1 percent in the fourth quarter of last year.

The US central bank, the Federal Reserve, has said that it was happy with its current policy, although there is speculation that the bank may undertake a third round of quantitative easing, referred to as QE3. (ANI)