U.S. GDP growth in Q1 revised upward

The U.S. economy shrank in the first three months of the year, but not as much as previously estimated, just 0.2 per cent according to estimates from the Commerce Department.

The U.S. makes three estimates of its quarterly growth, with this third estimate incorporating new data. The previous estimate was that U.S. gross domestic profit fell 0.7 per cent in the period from January to March.

The Commerce Department says the weakness was largely temporary, caused by harsh winter weather that slowed consumer spending.

Exports fell and imports rose, an effect of the rising U.S. dollar and port disruptions along the West Coast.

But there was rebound in the April-June quarter, with consumers stepping up their spending and home sales climbing.

The slowing in consumer spending looks more like a pause that refreshes after the strongest spurt in nearly a decade rather than the start of a weakening trend," BMO senior economist Sal Guatieri said in a note to clients.

"Thursday's May personal spending report is expected to show a strong rebound, led by decade-high auto sales, whichshould anchor a 3 per cent gain in both personal consumption and realGDPinQ2," he predicted.