US economy growth rate misses expectations

http://www.aljazeera.com/news/americas/2013/04/201342614326535652.html
This article talks about the US economy growth in the terms of GDP. The economists had estimated a three percent growth in the quarter, but the GDP had growth of only about two percent. This lack of expected growth is partly due to the slow performance of farming industry, which had a decline in output due to droughts throughout the United States, and partly because households cut back on saving to fund their purchases after incomes dropped at a 5.3 percent rate in the first quarter. The drop in income was the largest since the third quarter of 2009. The saving rate fell to 2.6 percent, the lowest since the fourth quarter of 2007, from 4.7 percent in the fourth quarter of 2012. The news will encourage the Federal Reserve to maintain its monetary stimulus. The US central bank, which meets next week, is widely expected to keep purchasing bonds at a pace of $85bn a month.Although government spending, which fell to a 4.1 percent annual rate, tax increases and federal budget cuts could slow growth later this year. Consumers managed to step up their spending despite the return of a two percent payroll tax and higher petrol prices. Despite the spike in petrol prices, inflation pressures were benign in the first three months of the year. An inflation gauge in the government's GDP report rose at a 0.9 percent rate, the smallest increase since the second quarter of 2012. The personal consumption expenditure index had increased at a 1.6 percent pace in the fourth quarter. Business spending on equipment and software slowed sharply, growing at an only three percent rate after a brisk 11.8 percent pace in the fourth quarter.