US economy grew 3.3 percent in first quarter
The US economy expanded 3.3 percent in the first quarter this year, less than 5.6 registered in the previous quarter.
Washington: The US economy expanded 3.3 percent in the first quarter this year, less than 5.6 registered in the previous quarter.
The advance report on US gross domestic product from the Commerce Department due marked three straight quarters of growth as the economy digs out of its worst recession since the Great Depression.
GDP measures total goods and services output within US borders.
Though the economy took a step back from its brisk pace in late 2009, the report showed areas such as consumer and business spending proved more robust in the first quarter.
The bulk of the growth in the fourth quarter came as businesses met more demand with new production and less by selling off goods sitting on the shelf.
Inventories are expected to play a lesser role in the first quarter, when consumers are seen taking up the baton.
"The key thing for sustaining and growing the US economy is consumer spending. Everything we know about the first quarter is looking very strong in that area," said Kurt Karl, head of economic research at Swiss Re in New York.
Data that has already come in on consumer spending has been robust. Analysts expect consumer spending during the quarter grew at a rate anywhere between 3.2 percent and 4 percent.
Consumer spending, which normally accounts for about 70 percent of US economic activity, grew only at a 1.6 percent pace in the fourth quarter.
There have been worries the US recovery, which has been led by the manufacturing sector as businesses begin to rebuild inventories, could sputter if consumers did not come on board. These concerns are beginning to take a back seat.
The Federal Reserve on Wednesday noted economic activity had continued to strengthen in recent week and the labor market was starting to improve.
However, saying it sill expects a modest recovery, it left benchmark overnight lending rates near zero and renewed its vow to keep them low for an extended period.
Last month the economy enjoyed the strongest jobs growth in three years as private employers stepped up hiring.
With agency inputs