The Commerce Department said increased personal spending continued to stimulate the economy, but those advances were partly offset by "a larger decrease in state and local government spending."
The downward revision "leaves the current economic recovery looking even less impressive compared with previous ones," said Paul Dales of Capital Economics in a research note.
While Dales expects growth in the second quarter to pick up to an annual rate between 3% and 4%, he said that will not be sustainable.
"Growth will soon slow as the rebound in world trade fades, inventory rebuilding slows and the size of fiscal injection shrinks," he said. "Overall, the U.S. economy may be performing much better than those in Europe, but this is still the weakest and longest economic recovery in U.S. post-war history."
During the last three months of 2009, economic activity grew at an annual pace of 5.6%.
Consumer caution may fuel debate over stimulus, deficitsGDP
