MikeLigalig.com

By Lucia Mutikani
Reuters

Economic growth cooled in the first quarter as businesses cut back on investment and restocked shelves at a slower pace, but stronger demand for automobiles softened the blow.

Gross domestic product expanded at a 2.2 percent annual rate, the Commerce Department said on Friday in its advance estimate, moderating from the fourth quarter's 3 percent rate.

While that was below economists' expectations for a 2.5 percent pace, a surge in consumer spending took some of the sting from the report and growth was still stronger than analysts' predictions early in the quarter for an expansion below 1.5 percent.

"There's nothing catastrophic happening, this is just slow growth and this underscores that the economy is on sound footing but nothing more," said Steven Baffico, chief executive at Four Wood Capital Partners in New York.

Futures for the broad-based S&P stock index pared gains after the GDP report, while U.S. Treasuries prices turned positive. The dollar extended losses against the yen and fell against the euro.

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