US GDP Up 2.5% In Q1 - Less Than Expected

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The U.S. economy grew 2.5 percent in the first quarter -- regaining speed, but at a slower pace than economists expected.

What’s more, the recent sequester that reduced federal spending by $85 billion -- triggering a “fiscal drag” -- is likely to slow the economy in the second quarter, most economists agree.

Further, that slow rate of growth will also likely compel the U.S. Federal Reserve to maintain its accommodative monetary policy, including its quantitative easing program.

First quarter GDP was aided by consumer spending, which rose 3.2 percent -- the largest increase since the end of 2010.

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