Here's an economic fact for you to consider: gathering the information to make these pronouncements is no joke. The fact is, it takes years to get it together enough to consider the figures reliable.

WASHINGTON (Reuters) - The U.S. economy grew much more slowly than previously thought in the first quarter while inflation was higher, a government report showed on Friday.

The surprise downward revision to gross domestic product -- which measures total output within the nation's borders -- cut growth to a 3.9 percent annual rate in the first three months of 2004 from the 4.4 percent reported a month ago and below the 4.1 percent pace in the final quarter of last year.

The government also ratcheted up a key gauge of inflation, confirming an acceleration in price rises that has fueled expectations the Federal Reserve will begin raising interest rates from 1958 lows next week to head off inflation.

The core price index for consumer spending -- a favorite of Fed Chairman Alan Greenspan that cuts out volatile food and energy prices -- gained at an annual rate of 2.0 percent in the quarter, a bump up from the 1.7 percent reported a month ago.

Prices for U.S. Treasury bonds seesawed after the report, torn on whether to focus on the slower growth or the faster inflation. The dollar slipped against the euro.

"It is a bit surprising that inflation was worse and consumption was up less," said Mark Vitner, senior economist at Wachovia Securities.