Growth over the first quarter was more sluggish than the already low bar set by analysts, which had softened from 1.2% to 1% this week.
And it was much lower than the New York Fed GDP tracker estimate of 2.7%.
It comes after the UK’s first-quarter GDP figures, released earlier on Friday, also disappointed to the downside as inflation began taking its toll on the services industry.
The Bureau for Economic Analysis said the usual seasonal one-off data impacted growth over the period, which was exacerbated by a warmer January and February.
Non-residential and residential fixed investments, exports and personal consumption were positive contributors to growth during the period, the commerce department said.
Axa Investment Managers senior economist David Page said he expects the “weakness to prove transitory.”
He said: “Consumer spending looks set to rebound from a particularly subdued first quarter – although we maintain caution for near term spending with real income growth crimped by rising inflation. We also expect inventories to rebound into next quarter, in keeping with survey evidence.
“That said, taking into account some of the downside risk posed by today’s weaker than our forecast number, we edge our forecast for 2017 GDP growth lower to 2.1%, from 2.2% (consensus 2.2%).
“Today’s GDP release will also revitalise the hard/soft data debate, although we would state that there is little evidence of any material softening in ‘softer’ data, which have proven good lead indicators of activity historically. This underpins our expectation for a rebound in activity next quarter.”
