WASHINGTON (MarketWatch) -- The U.S. economy grew at a 2.7% pace in the first quarter, the Commerce Department said Friday, an annualized rate that came in lower than what government forecasters had previously projected.

Economists have never been too impressed with the composition of growth in gross domestic product in the first quarter. More than half of the GDP increase came from inventory rebuilding, a temporary factor.

The revisions to this final reading on first-quarter GDP only highlighted the unbalanced nature of growth as consumer spending was revised lower.

Final sales, which exclude inventories, increased at a 0.8% annual pace, revised down from 1.4%.

First-quarter growth, originally estimated two months ago at a 3.2% annualized rate, was revised down to 3.0% growth in last month's estimate. The revisions come from more complete data than were available at the time of the first and second estimates.

The downward revision was a surprise. Economists surveyed by MarketWatch had been expecting no revision in the third estimate.

Growth in the first three months of the year decelerated from the 5.6% expansion in the fourth quarter of 2009.

The figures are seasonally adjusted and adjusted for price changes

Economists are forecasting stronger growth -- about 3.8% on an annualized basis -- in the second quarter ending June 30. But big questions remain about prospects for economic growth during the second half of the year.

The revisions to first-quarter GDP were in two major areas: consumer spending and trade.

Gross domestic purchases -- sales to U.S. residents -- rose at a 3.5% annual rate, revised down from 3.6%.

Corporate profits increased a revised $116.9 billion or a 8.0% quarterly rate, in the first quarter. This is up from the initial estimate of a 5.5% gain.

Profits generated by domestic financial corporations increased $11.2 billion, while domestic nonfinancial profits rose $79.6 billion.

More details

In current dollar terms, GDP rose 3.9% to an annual rate of $138.6 trillion.

Consumer spending rose at a 3.0% annual rate, down from a prior estimate of a 3.5% gain. This spending accounted for two percentage points to GDP.

Spending on big-ticket durable goods rose 12.0%

Consumer spending on nondurable goods rose 3.9%. Spending on services increased 1.4%.

Business investments rose at a 2.2% rate.

While investments in structures increased, investment in equipment and software declined.

Inventories rose by $41.2 billion. The change in inventories contributed 1.88 percentage points to growth.

Investments in housing shrank at a 10.3% annual rate. Residential investments subtracted 0.2 of a percentage point from GDP growth.

Exports rose 11.3%. Imports increased 14.8%. Net exports reduced growth by 0.8 of a percentage point.

Direct government spending subtracted 0.4 of a percentage point from growth.

Consumer prices increased at a 1.6% annual rate, while core consumer prices, which exclude food and energy inputs, rose 0.7%.