GDP growth revised higher, jobless claims up

Consumer spending rose at a slim 1 percent annual rate, the smallest gain since the second quarter of 2001, and home building plummeted at a 25.5 percent pace, the biggest drop since 1981 and the ninth consecutive quarterly decline.

However, investment in nonresidential structures rose 1.1 percent. A month ago the department had estimated that commercial building activity fell 6.2 percent.

In addition, while export growth was weaker than reported last month, imports were as well -- and more U.S. spending went to U.S.-made goods, bolstering growth.

Those factors more than offset a downward revision to the level of inventories. Economists said the leaner inventories was a healthy sign for future growth, as new sales will be supported more by new production rather than by existing items on store and warehouse shelves.

In its first estimate of corporate profits for the quarter, the Commerce Department said after-tax corporate profits rose 3.8 percent after falling 3.3 percent in the fourth quarter.

(Additional reporting by Emily Kaiser in Washington and Steven C. Johnson in New York; Editing by Neil Stempleman)