Growth in U.S. Trails Forecasts as Defense Spending Falls

The U.S. economy grew less than forecast in the first quarter as a drop in defense outlays undercut the biggest increase in consumer spending in two years.

Gross domestic product rose at a 2.5 percent annualized rate following a 0.4 percent fourth-quarter advance, according to data from the Commerce Department issued today in Washington. The median estimate of 86 economists surveyed by Bloomberg called for a 3 percent gain.