WASHINGTON — High gasoline prices, government budget cuts and weaker-than-expected consumer spending caused the economy to grow only weakly in the first three months of the year.
The Commerce Department estimated Thursday that the economy grew at an annual rate of 1.8 percent in the January-March quarter. That was the same as its first estimate a month ago. Consumer spending grew at half the rate of the previous quarter, and a surge in imports widened the U.S. trade deficit.
Most economists think the economy is growing only slightly better in the current April-June quarter. Consumers remain squeezed by gas prices, scant pay increases and a depressed housing market.
Analysts estimate that growth has accelerated slightly to around 2.5 percent in the current quarter. For the entire year, they think the economy will grow by about 3 percent. That would be little changed from the 2.9 percent growth in 2010.
But economists caution that their brighter outlook could be derailed if oil prices head higher or if financial markets are jolted by Europe’s debt crisis or a failure by Congress to raise the government’s borrowing authority.
“I think consumers will hang on and start to do their part to lift the economy,” said Mark Zandi, chief economist at Moody’s Analytics. “The job market is improving, and more job growth means more income growth, and that will help spending.”
