In the first of three reports on first-quarter 2006 GDP growth to be issued during the next two months, the U.S. Commerce Department figures the U.S. economy grew at an inflation-adjusted annual rate of 4.8% from January through March. The rate is right in line with what economists generally expected and marks a solid rebound from the final quarter of 2005, when the economy grew at 1.7% annual rate.
The first quarter's better showing was a result of higher consumer spending, increased business spending on equipment and software, higher exports and greater government outlays, the department said as it released its initial report on April 28.
Inflation as measured by the GDP implicit price deflator was at an annual rate of 3.3% in the first quarter of 2006, matching the highest rate since the second quarter of 2004, with the exception of the fourth quarter of 2005 when the rate was 3.5%.
Inflation as measured by the core personal consumption expenditure (PCE) index, the Federal Reserve's favored metric, was 1.9% year-over-year, down from 2% in the final quarter of last year. The core PCE index excludes prices changes for food and fuel.