The numbers: The U.S. grew a bit slower in the first three months of 2019 than originally reported, mostly because of weaker business investment. Corporate profits also fell for the second quarter in a row in a negative sign for the economy.

Gross domestic product, the official scorecard for the economy, grew at a 3.1% annual pace in the first quarter, the government said Thursday. GDP was marked down from an initial 3.2% estimate.

Economists polled by MarketWatch had expected first-quarter GDP to be revised down to 3%.

Adjusted corporate profits before taxes, meanwhile, fell at annual 2.8% pace, the biggest decline since 2015.

In another twist, inflation was even weaker than initially reported.

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What happened: Business investment rose a somewhat smaller 2.3% in the first three months of the year, revised GDP figures show. And the change in the value of inventories was a touch less at $125.5 billion.

Most other figures in the updated GDP report were little changed. Consumer spending rose a mild 1.3%, held down by reduced purchases of durable or long-lasting goods such as autos or appliances. Spending on durable goods sank 4.6% to mark the biggest drop in 10 years.

Exports were revised up to show a 4.8% increase, while the decline in imports was a bit smaller at 2.5%.

More notably, the PCE inflation index was revised to show a 0.4% increase of 0.6%. And the increase in the core rate was trimmed to 1% from 1.3%.

Inflation rose at a 1.4% pace year over year, well below the Federal Reserve’s 2% target. The shortfall has persuaded the central bank to shun further increases in a key U.S. interest rate in an effort to help the economy.

Big picture: GDP got a big boost in the first quarter because of an unusually sharp increase in spending by local and state governments. Companies also stockpiled more inventories and the trade deficit was smaller.

All of those trends could be reversed in the second quarter, leading to a smaller increase in GDP. Wall Street forecasters predict the economy will expand less than 2% in the spring.

What might also hurt is falling corporate profits, a slowdown in manufacturing and a breakdown in trade talks with China.

Corporate profits have risen just 3.1% in the past 12 months, down from a 10% clip less than a year earlier.

Another round of tit-for-tat tariffs between the U.S. and China has also put many companies on edge and disrupted their production plans. So far the damage has been small, but the longer the standoff goes on, the worse it will be for the economy.

What they are saying?: “The first quarter story remains the same — headline GDP growth was boosted by inventories and net exports, while consumer spending and business fixed investment rose at a lackluster pace,” said chief economist Scott Brown of Raymond James.

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Market reaction: The Dow Jones Industrial Average DJIA, +0.19% and S&P 500 SPX, +0.29% rose slightly in Thursday trades. Stocks have taken a beating over the past week and a half, however, after trades talks with China broke down.