--US Q1 GDP revised to +1.2% vs 1.3% --US Q1 final sales revised to +4.3% vs 4.4% --US net exports added 0.7 pt to Q1 GDP vs +1.1 pt --US Q1 consumer spending revised to +3.4% vs 2.9% --US Q1 capital spending revised to +1.9% vs +2.1% --US Q1 government spending revised to +4.8% vs +4.7% --Q1 GDP price deflator revised to +3.2% vs +3.3% --US net inventories subtract unrevised 3.0 pt from Q1 GDP By Andrew Williams Washington, June 29 (BridgeNews) - Softer net exports left the U.S. economy weaker in the first quarter than previously thought, the government announced Friday. Gross domestic product rose 1.2%, a notch lower than both the previous official estimate and analysts' expectations. * * * "The small downward revision to real GDP reflected offsetting revisions to net exports and to consumer spending," the Commerce Department said. U.S. net exports added 0.7 percentage point to the government's final estimate of first-quarter GDP, compared with 1.1 points in the prior report, released May 25. However, an upward revision to consumer spending largely offset the downward pull from trade. According to the latest data, personal consumption expenditures grew at a 3.4% annual pace in the first quarter, compared with the previously estimated 2.9%. OTHER DETAILS Capital spending was weaker than the 2.1% gain last reported, rising 1.9%. The Federal Reserve cut interest rates this week, citing an ongoing decline in corporate outlays as a key concern. Business spending on structures grew at a 15.3% pace, after the 17.2% last reported. Outlays for equipment and software fell at a 2.3% rate, compared with the 2.6% rate in the previous estimate. Government spending was slightly stronger in the latest report, growing at a 4.8% rate, compared to 4.7% last time. Inventory investment subtracted 3.0 percentage points from growth, unchanged from the prior report. Real final sales, which measure GDP excluding inventories, rose a revised 4.3%, just below the 4.4% increase last recorded. The economy, which has grown at least 4.0% in each of the past four years, may not even manage half that rate this year and has been fading since last summer. Most analysts link the deceleration to an unwinding of outsized inventories and investment. High energy prices and a stock market sell-off have also taken their toll. The Federal Reserve has sought to combat the weakness by slashing the federal funds interest rate 2.75 percentage points since January to 3.75%--the lowest level in 7 years. Bush administration officials hope the easing of monetary policy and lower taxes will boost the economy by the year-end, with Treasury Secretary Paul O'Neill frequently noting that growth of less than 3.5% is below potential. INFLATION The GDP price deflator rose at a 3.2% pace, down a notch from the prior estimate. The consumer spending price index was unrevised at 3.2%, while the core consumer spending price index was up 2.6%. WHAT WAS EXPECTED The BridgeNews survey of economists' estimates for GDP ranged from up 0.8% to up 1.4%. The final sales projections ranged from up 4.1% to up 4.4% with the consensus at up 4.4%. The PCE index was expected to fall 3.2%, while the price deflator was pegged at 3.3%.