The U.S. economy grew just 0.7 percent in the first quarter of this year, the slowest in more than four years, new data from the U.S. Commerce Department showed on Thursday. The gross domestic product reading for the January-to-March period was a slight improvement from the 0.6 percent growth rate estimated a month ago, but still short of economists' forecasts for a 0.8 percent pace. The figure, which will probably turn out to be the weakest point for the economy this year, has been partly attributed a clampdown on spending among businesses concerned about the continuing housing slump. Despite the cautious business approach, consumer spending remained solid, preventing the economy from falling further. Gross domestic product, a measure of the value of all goods and services produced in the United States, is considered the best barometer of the country's economic standing. Even though the economy slowed in the first quarter, an inflation gauge picked up speed. The inflation gauge tied to the GDP report and closely watched by the Federal Reserve showed that core prices - excluding food and energy - rose at a rate of 2.4 percent in the first quarter. That was higher than previously estimated and was faster than the 1.8 percent pace in the fourth quarter. In other economic news, the number of people applying for unemployment insurance last week fell, a sign the national job climate remains healthy. The Labor Department reported that new applications for jobless benefits dropped by 13,000 to 313,000 in the last week. Economic growth in the April-to-June quarter could be anywhere between 2.3 percent and 3 percent pace, with economists predicting the rise despite expectations for a continuing downturn in the housing market.
