The US economy staged a spectacular recovery in the first quarter of this year, growing at a 5.8 percent annualized rate, the Commerce Department said yesterday.
The report was stronger than expected by economists, who had forecast an increase of around 5 percent. It was the largest increase in GDP since the the fourth quarter of 1999.
GDP growth accelerated from a 1.7 percent rate in the fourth quarter of last year.
The report was an "advance" estimate of GDP -- the output of goods and services in the US economy -- and will be revised twice in the next two months.
The report suggests that the recession declared to have begun in March last year is over and was a limited downturn with just one decrease in quarterly GDP.
However, the National Bureau of Economic Research -- which dates peaks and troughs in US business cycles -- has yet to officially declare an end to the recession.
Economists noted that much of the increase in GDP was due to companies building back inventories. Merrill Lynch's Bruce Steinberg said that "inventories contributed a large chunk of that growth, but domestic demand was a healthy 3.7 percent."
He added: "Despite some recently mixed indicators -- which simply reflect the long-awaited spring payback for the record warm winter -- we expect GDP growth to average more than 4 percent for each quarter during the remainder of the year."
Henry Willmore of Barclays Capital said the growth rate "reflected solid contributions from consumption (3.5 percent), residential investment (15.7 percent) and government spending (7.9 percent)."
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