NEW YORK (Reuters) – The U.S. economy is on course to grow 0.8 percent in the second quarter as weaker-than-expected data on consumer spending in April was offset by a larger-than-forecast increase in construction spending, Atlanta Federal Reserve’s GDPNow forecast model showed on Monday.
This was unchanged from its previous reading on May 26.
The government said personal consumption was unchanged in April following a revised 0.5 percent rise in March.
The slow start to the second quarter for the consumer sector, which accounts for two-thirds of the U.S. economy, brought real consumption growth to 2.1 percent from 2.6 percent, the Atlanta Fed said on its website.
The drop in consumption was mitigated by a 2.2 percent jump in construction spending last month to its strongest level in 6-1/2 years.
Last week, the U.S. Commerce Department downgraded the gross domestic product in the first quarter to a 0.7 percent contraction from the initial reading of a 0.2 percent growth due to severe winter weather, a strong dollar and strikes at West Coast ports.
(Reporting by Richard Leong; Editing by Chizu Nomiyama and Meredith Mazzilli)