US first-quarter growth revised up to 1 per cent (Roundup)

Business News

Jun 26, 2008, 13:34 GMT

Washington - The United States economy grew by an annualized 1 per cent in the first quarter of 2008, the Commerce Department said Thursday, revising upwards an earlier estimate and further easing concerns that the world's largest economy may have entered a recession. The government's final figure for seasonally-adjusted growth was up from an earlier estimate of 0.9 per cent for the first three months of the year. The economy grew by 0.6 per cent in the fourth quarter of 2007. US growth was held up mostly by strong exports - buoyed by a weak dollar - and spending in the services sector, but the housing market and durable goods purchases remain sluggish, the department said. Consumer spending, which accounts for about two-thirds of total output, rose by 1.1 per cent. Gross domestic product is still well below average growth for the US economy of between 2-3 per cent in recent years, and some economists have warned the country is headed towards a prolonged period of so-called stagflation - sluggish growth or even a recession combined with higher inflation. The Federal Reserve held interest rates steady on Wednesday at 2 per cent, after slashing the federal funds rate 3.25 per cent since September. The central bank cited indications of higher inflation risks amid surging energy and food prices. The upwards growth revision Thursday was mostly due to slightly rosier figures for exports, which climbed 5.4 per cent in the quarter.

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US first-quarter growth revised up to 1 per cent (Roundup)

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