The U.S. economy grew at a sluggish 0.7 percent annual pace in the first quarter as businesses reduced spending and the severity of the housing slump remained uncertain, the Associated Press reported.

The U.S. Commerce Department reported that the gross domestic product grew at the slowest pace in more than four years and is far below last year’s growth of 2.5 percent. The GDP growth rate also fell slightly short of analysts’ estimate of 0.8 percent.

The GDP, which measures the value of all goods and services produced in the United States, is considered the best barometer of the country’s economic standing. Core prices, which exclude food and energy and are considered an important inflation gauge, rose 2.4 percent.

The housing slump seems to be the biggest impediment to GDP growth, with investment in home building falling 15.8 percent on an annualized basis in the first quarter. Businesses also cut back on inventory investments by nearly 1 percentage point to ensure inventory is in line with consumer demand.

For the most part, consumers carried the economy, with spending growing at a 4.2 percent pace for the second quarter in a row, as the job climate remained healthy. Analysts believe economic growth in the second quarter could be anywhere from 2.3 percent to more than 3 percent.