The US economy expanded at a slightly slower pace in the first three months of the year as a drop in home buying offset an increase in business investment, the Commerce Department said today. 

More complete data on the economy show GDP increased by 2.2% in the first quarter, a tenth of a percent lower than in the preliminary report last month.

That was still significantly slower than the 2.9% growth seen at the end of 2017, and farther from the White House goal of 3% expansion, despite the massive tax cut approved in December that was expected to juice the economy.

That slowdown was attributed to a decline in exports, household spending and government spending at all levels, the report said. 

Economists had expected GDP to remain steady at 2.3% as reported in the preliminary estimate.

But first quarters often tend to be slower than other periods, and the data will be revised once more next month.

The 2% decline in residential fixed investment - essentially home buying - was a significant contributor to the downward revision in the second GDP estimate, even though it was offset by a big increase in business investment.

Slower household spending on services, including health care, also fed into the slower GDP. But that was offset by higher spending on goods, notably used vehicles.

Meanwhile, imports, which subtract from growth, were slightly higher than first estimated. 

A closely-watched measure of inflation, the "core" Personal Consumption Expenditures price index, which strips out volatile food and energy prices, was revised down to 2.3% from 2.5%, which was the highest in more than 10 years.

Even the revised figure was the highest in seven years. 

That will ease some of the concern that the Federal Reserve might feel the need to raise interest rates at a faster pace if growth speeds up and inflation accelerates, a prospect that has spooked investors in recent weeks.

The Fed is widely expected to raise the benchmark interest rate in mid-June for the second time this year, and many economists now expect it to hike a total of four times this year to prevent prices from rising too far past the 2% goal. 

But the Fed has signalled clearly that it will tolerate inflation slightly above 2% for some time.