First quarter economic growth in the first of three official estimates was pegged at 1.8 percent compared to the fourth quarter of 2010, a sharp drop from the 3.1 percent growth in the previous three-month period.
The slowdown was attributed to "a sharp upturn in imports," as well as a significant decrease in government spending, the department said.
The figure is in line with the consensus forecast and was also predicted by U.S. Federal Reserve Chairman Ben Bernanke at a press conference Wednesday.
The Commerce Department said consumer spending increased 2.7 percent in the first quarter, a positive sign, but not as encouraging as the fourth quarter, when spending rose 4 percent.
Spending on goods rose 4.8 percent, while spending on services climbed 1.7 percent.
Business investments in software and equipment climbed 4.9 percent, but imports, which count against GDP growth, rose 4.4 percent.
Exports were flat. Government spending, a category of concern as Washington lawmakers discuss more budget cuts, dropped 5.2 percent after falling 1.7 percent in the previous quarter.