The US economy was stronger than we thought in the first quarter

The US economy grew 1.1% in the first quarter, according to the third estimate of gross domestic product.

Economists had forecast that the economy grew 1%, up from the second GDP estimate of 0.8%, according to Bloomberg.

But there was a significant downward revision to personal consumption, which contributes to about 70% of growth. It was dropped to a two-year low of 1.5% from 1.9%. Economists had expected an upward revision to 2%.

Corporate profits were revised higher, and overall gross domestic income was lifted to 2.9% from the prior print of 2.2%.

First-quarter growth has been below trend for the last five years, revised by up to 0.6 percentage points, prompting economists to question the Bureau of Economic Analysis' methodology.

The notable change in the second estimate was to business inventories, which reflected a weaker drag on growth than previously reported. Also, wage growth was revised higher.

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