Consumers shine despite slower-than-expected GDP
WASHINGTON (Reuters) - The economy grew at a slightly slower-than-expected pace in the first quarter, held back by inventories and exports, but resurgent consumer spending offered evidence of a sustainable recovery, a government report showed on Friday.
Gross domestic product expanded at a 3.2 percent pace, the Commerce Department said in its first estimate — marking three straight quarters of growth as the economy climbs out of the worst recession since the 1930s.
Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 3.4 percent rate in the first three months of 2010 after a 5.6 percent growth pace in the fourth quarter.
Despite the slowdown from the prior quarter, details of the report were fairly upbeat, with consumer spending accelerating at a 3.6 percent rate, more than double the 1.6 percent pace in the fourth quarter. The first-quarter rise was the largest since the first quarter of 2007.
Consumer spending, which normally accounts for 70 percent of U.S. economic activity, added 2.55 percentage points to GDP last quarter, the biggest percentage contribution since the fourth quarter of 2006.
(Excerpt) Read more at news.fidelity.com
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