The U.S. economy expanded at a sluggish 0.6% annual pace in the first quarter, the government said April 30 in its first estimate of gross domestic product. The Commerce Department report was slightly better than expected and came amid fears that the world's biggest economy might be headed for recession, generally defined as two consecutive quarters of declining activity.
The 0.6% growth rate was the same as in the fourth quarter of 2007.
Consumer spending, the key driver of the economy, slowed to a 1% growth rate from 2.3% in the fourth quarter. It was the weakest growth since 2001 for consumer activity.
Growth was helped by growing exports and inventory building. Exports grew 5.5% after rising 6.5% in the fourth quarter. Inventories added 0.81 percentage points to growth after subtracting 1.79 percentage points in the fourth quarter.
Weakness in the housing market continued to drag down growth. Real residential fixed investment fell 26.7% in the first quarter after falling 25.2% in the fourth quarter.
Business investment outside housing fell 2.5% in the quarter, the biggest drop in four years, following a 6% increase in the prior quarter.
Without adjusting for inflation, the report shows that GDP -- the market value of the nation's output of goods and services -- increased 3.2% to a level of $14.185 trillion.
Copyright Agence France-Presse, 2008