The Boston Globe

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US growth slower than thought

Fall in spending by governments is a major factor

WASHINGTON — The US economy grew at a slower rate earlier this year than first estimated, the government said Thursday, one day before a critical report on May job growth.

The slower growth — at a 1.9 percent annual rate —in the first three months of the year was attributed largely to governments and consumers spending less and businesses restocking more slowly.

The Commerce Department had initially estimated growth at 2.2 percent.

Peter Newland, an economist at Barclays Research, said he was discouraged by the economic slowdown.

‘‘This report does little to change the perception of an economy ticking along at a moderate pace but failing to break out into a full-on recovery with consistently above-potential growth,’’ Newland said.

The government issues its report Friday on May employment. Economists expect it to say that employers added 158,000 jobs. That would be better than in the past two months but far below the winter’s pace of 252,000 jobs per month.

They also expect no change in the US unemployment rate, which was 8.1 percent in April.

A big reason growth slowed in the January-March quarter was that government spending at all levels fell at a 3.9 percent annual rate. That’s the biggest decline in a year and nearly a full percentage point more than estimated last month.

Government spending has declined for six straight quarters. And national defense spending has tumbled in the past two quarters. It fell at an 8.3 percent annual rate in the first quarter of 2012 and at a 12.1 percent annual rate in the final three months of 2011. The declines largely reflect the winding down of the Iraq war.

Spending by state and local governments fell at a 2.5 percent annual rate in the first quarter, double the initial estimate. Many economists had thought the worst was over at the state and local level.

‘‘This throws some cold water on the view that state and local governments have already bitten the bullet,’’ said Diane Swonk, chief economist at Mesirow Financial.

Analysts think the economy is growing at a slightly faster rate this spring.

Hiring has been steady and gas prices are lower, allowing consumers to spend more freely.

Consumer spending drives 70 percent of economic activity.

Still, growth of 2.5 percent typically generates only enough jobs to keep pace with population changes.