The government reported yesterday that the nation's economy grew less rapidly last quarter than originally estimated, confirming that the recession began early and abruptly.
Revised Commerce Department figures showed the real gross national product, or output of the economy adjusted for inflation, grew at an annual rate of only 0.6 percent rather than the 1.1 percent pace reported previously.
At the same time, the department reported that the after-tax profits of American corporations rose 5.9 percent during the first three months of this year, mainly because of the impact of inflation on inventory values.
Profits from current production, regarded by many analysts as a more realistic measure of corporate health, fell 2.6 percent last quarter following a 2.4 percent drop in the final three months of 1979.
The combination of statistics provided further evidence of the rapidity of the current slide, which many economists now believe will be significantly more severe than the "short and mild" recession President Carter predicted.
Meanwhile, Treasury Secretary G. william Miller reiterated yesterday that Carter no longer will insist that the budget be balanced before agreeing to a tax cut, but only that congress has restrained spending sufficiently.
Miller's nuance was designed to leave the administration with some flexibility in case the recession crimps tax revenues too much to make budget-balancing possible. Officials said Carter still will insist on trimming spending sharply.
The revised report on the growth of real output was expected by economists. The 0.6 percent annual rate of the first quarter compares with a 2 percent annual rate in the final three months of 1979 and a 3.1 percent pace the quarter before that.
At the same time, the department sad the overall inflation rate, as measured by the comprehensive GNP prince index, was 9.3 percent last quarter rather than the 9.5 percent pace recorded in the preliminary estimate.
The earlier estimate that real output had risen at a 1.1 percent annual rate during the quarter had surprised some economists, who contended more current figures were showing a more precipitous economic slide.
Later-breaking data apparently proved these suspicions correct. The revised report showed consumer spending significantly lower than previously estimated, with housing and federal government purchases also down sharply.
The report on corporate profits showed after-tax profits up 5.9 percent over the quarter to a new annual rate of $155.5 billion, following an 0.9 percent decline in the final three months of 1979.
Before-tax profits rose 5.8 percent to an new annual rate of $257.1 billion, capping on 0.3 percent increase the previous quarter.In both cases, the figures reflect the impact of the new crude oil tax.
However, analysts said the rosy figures stemmed primarily from the impact of inflation on inventory values, and didn't reflect any genuine improvement. Inventory values soared to $63.2 billion, from $46.5 billion -- the sharpest rise on record.
Profits obtained from current production, a computation designed to adjust for some inflation effects, fell 2.6 percent to a $171.8 billion annual rate, outstripping a 2.4 percent drop the previous quarter.
Miller's position on the tax-cut issue isn't a new one for the administration. President domestic adviser Stuart E. Eizenstat outlined a similar stand and Miller himself has used it before.
The shift in the administration's rhetoric was made after officials became fearful that too rigid an adherence to a balanced budget as a precondition for a tax cut might leave the White House in a box in case of deep recession.