Traders seemed to shrug off data showing the annual rate of core consumer price growth surged up to 2.5 percent in the first quarter from 1.9 percent in the fourth quarter.
Even so, the results underline the difficulty of achieving President Donald Trump's goal of 3% sustained growth, despite corporate and individual tax cuts that went into effect in January. Most experts view the setback as temporary against the milieu of a tightening labor market along with strong consumer confidence and business growth.
In addition to the slowdown in consumer spending, the USA first-quarter GDP report showed cooling in business-equipment spending and residential investment, with the government citing a downturn in brokers' commissions on home sales.
America's economic growth slowed at the beginning of 2018 as household spending stalled in spite of recent tax cuts.
Businesses also built inventories in the first quarter, which added to growth.
"It is increasingly hard to argue that the 2 percent inflation target hasn't already been breached", said Steven Blitz, chief US economist at TS Lombard in NY.
Business spending remained robust, with spending on commercial construction, equipment and software rising at an annualized rate of 6.1%. Nonresidential fixed investment contributed 0.76 percentage points to top-line growth, with positive spending on inventories adding another 0.43 percentage points. Deductions were more valuable against the higher rate, and December's tax law allowed companies to take immediate write-offs for certain capital expenses made after September 27, 2017, rather than depreciating them over time. A bit of inflation is considered a good thing, but some economists worry that the $1.9 trillion in debt the CBO predicts the US will take on due to the tax plan will increase inflation too rapidly.
Residential investment was also flat in the first three months of the year, possibly due to winter storms and higher short-term interest rates, according to analysts. Such building is sometimes associated with destocking later on and could damp growth in the months ahead.
Your Health: Artificial sweeteners linked to obesity and diabetes, mice study suggests
So, they focused on two sugars (glucose and fructose) and the zero-calorie sweeteners aspartame and acesulfame potassium. Hoffman will present the research at Experimental Biology 2018 in San Diego today.
Meanwhile net exports added 0.20 percentage point to growth.
Business spending on equipment is forecast to have slowed after double-digit growth in the second half of 2017. Both categories tend to be volatile from quarter to quarter. A measure of overall inflation rose.
GDP in the United Kingdom grew by just 0.1% for the first quarter as uncertainty over the UK's exit from the European Union next year crimped business investment and weighed on construction.
While GDP growth was the best for any January-March period since 2015, it's a step down from three quarters of GDP growth above or near 3 percent, and a reminder that the first quarter remains plagued by data quirks. Excluding food and energy prices, the PCE price index increased 2.5 percent.
The Federal Reserve is expected to keep lifting its key interest rate to prevent unwanted inflation, and big federal budget deficits are likely to push up government borrowing costs.
The Labor Department figures showed that the employment cost index, which includes wages and benefits, rose 0.8% from the previous quarter, topping the median estimate of 0.7%.
The current expansion, which began in mid-2009, is the third-longest on record and set to become the second-longest in May. It grew at a 6.8% rate in the previous quarter.