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Saturday 21st of June 2008
April 28, 2006

US economy sees first-quarter growth


by Elaine Frei

Led by higher consumer spending, the US economy grew at an annualized pace of 4.8 percent in the first quarter of 2006, new data has revealed. That figure was about what analysts had expected and comes after growth of just 1.7 percent in the last quarter of 2005.

Consumer spending was up by 5.5 percent in the quarter, following a gain of only 0.9 percent in the previous quarter. Consumer purchases of durable goods grew by 20.6 percent in the quarter after a drop of 16.6 percent at the end of 2005. Other figures feeding into the growth equation included a gain of 3.5 percent in real national output and fixed non-residential investment up by 14.3 percent after a gain of 4.5 percent in the last quarter. Imports continued to grow faster than exports, but not by much as exports grew by 12.1 percent and imports were up by 13 percent. One measure of inflation, the price deflator, was up 3.3 percent in the first quarter and grew slightly slower than it did in the last quarter of last year.

In line with the comments of US Federal Reserve Chairman Ben Bernanke, who said in testimony before Congress on Thursday that economic growth in the US will slow to more sustainable levels later on in the year, some analysts have said that growth in the second quarter of 2006 will be weaker than that in the first quarter, probably at 3 percent or less, with a drop in consumption leading the way.

Story link: US economy sees first-quarter growth


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