Growth in the U.S. economy cooled in the first quarter to an annual rate of only 0.6 per cent, the weakest showing since the end of 2002.

The U.S. Commerce Department said Thursday that growth in the January-to-March period was down from an earlier government estimate of a 1.3 per cent annual expansion rate.

The first-quarter figure was also down sharply from the 2.5 per cent annualized rate seen in the last three months of 2006.

Falling business investment in inventory supplies, coupled with a growing U.S. trade deficit, were cited as the main reasons for the weak growth rate.

The trade deficit wiped one percentage point from the growth rate, while the falling inventories erased almost another percentage point.

Many economists see the U.S. economy picking up from the first quarter. The National Association of Business Economists is predicting a rebound to 2.3 per cent annualized growth in the April-to-June quarter.

With files from the Associated Press