Official figures show that the US economy grew at a slower pace than previously estimated in the first quarter of the year as businesses investment slackened.
The Commerce Department report also showed that hard-hit state and local governments curbed spending at the steepest rate since 1981.
Gross domestic product expanded at a 3% annual rate, the department said, instead of the 3.2% pace it reported last month. Analysts had expected a 3.4% growth rate.
The US economy expanded at a 5.6% pace in the fourth quarter of 2009 and has now grown for three straight quarters.
Output in the first three months of the year was revised down as business spending rose at only a 3.1% rate instead of the 4.1% initially reported last month. Business spending on software and equipment increased at a 12.7% rate rather than the 13.4% reported last month.
State and local government spending contracted at a 3.9% rate, the largest decline since the second quarter of 1981.
But consumer spending, which is key to the economy's recovery, held up well. Consumer spending increased at a 3.5% annual rate, rather than the 3.6% reported last month. Although it was revised down slightly, it was still more than double the 1.6% pace in the fourth quarter and the largest advance since the first quarter of 2007.
Recovery from the longest and deepest recession since the Great Depression had so far been largely driven by the manufacturing sector as businesses replenished their warehouses to meet strengthening demand. Consumers, however, are now participating as the labour market begins to steady.
