Atlanta Fed downgrades U.S. first-quarter GDP view to 1.4 percent

NEW YORK (Reuters) - The U.S. economy is on track to grow 1.4 percent in the first quarter following disappointing data on durables goods orders and home resales, the Atlanta Federal Reserve’s GDPNow forecast model showed on Thursday.

That pace was weaker than the regional Fed’s prior estimate of 1.9 percent on March 19, the Atlanta Fed said on its website.

On Thursday, the Commerce Department said orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, dropped 2.8 percent last month after gaining 4.2 percent in January.

Earlier this week, the National Association of Realtors said existing home sales tumbled 7.1 percent to their lowest level since November.

In the wake of those reports, the Atlanta Fed program marked down several contributions to its GDP forecast.

It now forecast for first-quarter real equipment investment growth declined from 0.9 percent to -1.4 percent, while its outlook on inventory investment in 2009 dollars declined from -$9 billion to -$11 billion.

Its forecast for real residential investment growth slowed from 14.6 percent to 7.8 percent.

Reporting by Richard Leong; Editing by Chizu Nomiyama