U.S. Markets

N.Y. Fed lowers U.S. second quarter, third quarter U.S. GDP growth forecasts

The corner stone of The New York Federal Reserve Bank is seen surrounded by financial institutions in New York's financial district March 25, 2015. REUTERS/Brendan McDermid

NEW YORK (Reuters) - The New York Federal Reserve said on Friday it had lowered its forecasts for U.S. economic growth in the second and third quarter largely due to recent negative data on domestic manufacturing activities.

U.S. gross domestic product is on track to grow at an annualized pace of 2.1 percent, slower than the 2.4 percent rate estimated two weeks ago, while third-quarter GDP would moderate to a 2.1 percent growth rate from 2.2 percent calculated two weeks earlier, the regional central bank said on its website.

“The largest negative contributions came from manufacturing data, only partly offset by positive news from retail sales and housing data,” the New York Fed said in a statement.

On Wednesday, the Federal Reserve said industrial output unexpectedly fell 0.4 percent in May after increasing by a downwardly revised 0.2 percent in April. Motor vehicles and parts production posted its biggest monthly decline in almost 2-1/2 years.

Earlier Friday, the Commerce Department said domestic housing starts fell 0.3 percent due to a drop in multi-family construction. This followed a Commerce report released on Tuesday that showed U.S. retail sales rose 0.5 percent last month, following a 1.3 percent jump in April.

Reporting by Richard Leong; Editing by Bernadette Baum