The Big Picture tells the story:
The Big Picture | GDP = 1.3%: By now, you know the GDP came in way below consensus.... The economy slowed to its weakest pace of gains in 4 years, when GDP was 1.2% during Q1 2003. Housing gets most of the blame (duh), but do not ignore the accelerating inflation factor as a key element. Most traders realize the Fed is watching that component closely; Hence, why you are not hearing the usual "Rate Cut" chants from the cheap seats. PCE rose 3.4% (it decreased 1.0% Q4) Even the nonsensival core PCE (ex food and energy) was plus 2.2% (following 1.8% Q4).
International trade, Business Capex spending, Inventory growth, and decreased government spending all weighed on the economy to produce that 1.3% number. The one bright spot: Durable goods. Plus 7.3% in Q1 follows +4.4% in Q4. Pretty much everything else was punk.