GDP revised down to 1.9 percent for first quarter of 2012

The economy grew at a slower rate during the first three months of the year than first estimated, according to new government data released Thursday. 

The Commerce Department said the economy expanded at an annual rate of 1.9 percent from January to March, slower than the initial estimate of 2.2 percent, as consumer spending slowed, businesses pulled back on adding inventory and the trade deficit widened despite an increase in exports.  

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The lowered rate is an ominous sign for President Obama, whose reelection chances could hinge on the performance of the economy in the run-up to the November election.

Rep. Kevin BradyKevin Patrick BradyOvernight Health Care — Presented by National Taxpayers Union — House Dems change drug pricing bill to address progressive concerns | Top Republican rejects Dem proposal on surprise medical bills | Vaping group launches Fox News ad blitz Top Republican rejects Democratic chairman's approach to stopping surprise medical bills America's workers and small business owners need the SECURE Act MORE (R-Texas), vice chairman of the Joint Economic Committee and senior member of the House Ways and Means Committee, said the figures reflect the Obama administration’s “misunderstanding of the way the world really works.”

“Try as we might, I see no other way to interpret these disappointing results,” Brady said.

“Time after time, the Obama administration has been presented with evidence that its policies have been a drag on the economy. Yet it has forged ahead with them just the same.”

Economists are optimistic, however, that growth is picking up and will come in at 2.5 percent for the year, an increase over last year's disappointing 1.7 percent. 

The economy expanded at an annual rate of 3 percent in the final three months of 2011.

Lower gas prices, which are down more than 30 cents since early April, could help spur more consumer confidence and spending, which accounts for 70 percent of economic activity and is needed to drive the recovery. A pickup in spending and demand will lead businesses to restock their shelves. 

Economic growth needs to move at a faster clip to lower unemployment. Job creation during the warm winter months eclipsed growth levels, and gains have slowed through the spring, more in line with the economy's expansion. 

Job-market analysts expect that employers added about 160,000 jobs in May — the June report is due out Friday — and are expecting slightly faster job growth through the summer months. 

Better job growth and a lower unemployment rate could lend a hand to Obama's reelection campaign against Mitt Romney.

While growth remains slower than hoped, there are other positive indicators within the economy, including a gradual improvement in the housing market, which has posed a huge problem throughout Obama's presidency.

Home prices appear to be stabilizing, and the National Association of Realtors is expecting the market to improve this year at a faster rate than initially forecast.

The real estate group also upgraded its housing forecast, estimating that existing-home sales will hit 4.66 million this year, up from 4.26 million in 2011, with estimates for next year up to 4.92 million.

Home prices ticked up in a majority of major U.S. cities in March for the first time in seven months as the housing recovery continues its gradual recovery, according to the Standard & Poor's/Case-Shiller home price index released Tuesday.