The US economy grew at its softest pace in two years during the first quarter this year.
It slowed to a 3.1 per cent annual rate of expansion as consumers and businesses curbed spending in the face of rising prices.
Wall Street economists had forecast first-quarter GDP would grow at a relatively more robust 3.6 per cent rate.
Since the first-quarter GDP data was compiled, oil prices have continued to rise, and fears have grown they will feed into the broader economy, with many analysts expecting growth in the second quarter to be affected further.
The softer-than-expected start to 2005 likely will boost expectations that Federal Reserve policymakers, who meet again next Tuesday to consider interest-rate strategy, will stick to a policy of smaller, gradual rate rises.
Growth in consumer spending - which fuels about two-thirds of US economic activity - slowed, with personal consumption expenditures easing to a 3.5 per cent annual rate in the first quarter from 4.2 per cent in the closing quarter last year and from 5.1 per cent in last year's third quarter.
The falloff in the rate of growth of business investment was more striking, down to a 4.7 per cent annual rate from 14.5 per cent in the final quarter of 2004.
Spending on equipment and software - the hard goods and computer programs that companies use to boost production - grew at a 6.9 per cent rate in the first quarter after an 18.4 per cent surge in the closing months of 2004.
It was the weakest growth in equipment and software spending since the first quarter of 2003 when it rose at a 4.5 per cent rate.
The economy received a boost from strong inventory-building, which shot upward during the first quarter at an annual rate of $80.2 billion following a $47.2 billion pace of increase in the fourth quarter.
That was the most vigorous pace of inventory addition in almost five years, since $99.3 billion in the second quarter of 2000.