The US economy grew at a revised 5.6 percent annual rate in the first quarter as the fastest pace of growth in 2-1/2 years generated robust corporate profits, the Commerce Department said on Thursday.
In its final gauge of first-quarter performance, the department pushed its estimate of first-quarter growth in gross domestic product up from 5.3 percent it reported a month ago.
That slightly exceeded Wall Street economists' predictions for a 5.5 percent rate and was more than triple the 1.7 percent pace recorded in last year's fourth quarter. It was the strongest quarterly growth in 2-1/2 years since a 7.2 percent rate in the third quarter of 2003.
The report also showed inflation remained in check. The core personal consumption expenditures price index, which the Federal Reserve favours, rose at a 2.0 percent rate, the same as estimated a month ago. The measure showed a 2.4 percent rise in the fourth quarter.
Separately, the Labour Department reported that new claims for weekly jobless pay climbed by 4,000 last week to 313,000 - still a level that analysts say is consistent with a healthy job market.
The four-week moving average of new claims, which smooths weekly volatility to offer a better picture of underlying labour market trends, fell by 6,000 last week to 305,500. Analysts said the data was likely to add to reasons for Federal Reserve policy makers to announce another rise in interest rates when a session of its Federal Open Market Committee concludes in mid-afternoon on Thursday.
The GDP data showed consumer spending in the first quarter advanced at a revised but still sizzling 5.1 percent rate rather than 5.2 percent estimated a month ago, far ahead of the 0.9 percent rate recorded in the fourth quarter.
The department said its main reason for revising first-quarter GDP upward was that imports were not as strong as it previously had calculated. Imports, which act as a drag on overall GDP, rose at a 10.7 percent annual rate in the first quarter rather than 12.8 percent. Corporate profits also grew more strongly than the government previously thought, rising at a 13.8 percent annual rate after taxes instead of 8.8 percent it estimated a month ago. That matched the fourth quarter's rate of profits growth, which was the highest rate in four years.
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