The U.S. economy grew at a soft 1.1% annual pace in the first three months of this year, as declining business investment offset strong consumer spending and pointed to slowing growth.
Wall Street analysts had forecast a 2% increase in gross domestic product, the official scorecard for the economy.
Consumer spending, the main engine of U.S. growth, drove the economy forward in the first quarter. Outlays jumped at a 3.7% clip, the government said Thursday, the biggest increase in almost two years.
Households got little help from businesses, however, and probably can't expect much in the near future. Companies cut investment and reduced production, shaving 2.3 percentage points off headline GDP.
Rising interest rates and stress in the banking system have hurt business investment while softening sales has forced some companies to lay off workers.
Many economists believe the combination of rising interest rates and still-high inflation will plunge the U.S. into a recession later this year.
"The US economy is unwell, and it's starting to show," said chief economist Gregory Daco of EY Parthenon.