U.S. Economy Grew 4.8% in 1st Qtr, Most in Two Years.
April 28 (Bloomberg) -- The U.S. economy expanded in the first quarter at an annual pace of 4.8 percent, the fastest in more than two years, led by resurgent consumer spending and the biggest jump in business investment since 2000.
The rise in gross domestic product, the value of all goods and services produced in the U.S., followed a 1.7 percent annual rate of increase in the previous three months, the Commerce Department reported today in Washington. Consumer spending on durable goods such as appliances rose the most since 2001.
`Consumers are still willing to spend, even with the high energy prices, and capital investment is booming,'' said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, who correctly forecast the GDP number. ``By the second half of the year, we'll see the cumulative effect of interest- rate increases begin to bite and the economy slow.''
Consumer Spending
Consumer spending, which accounts for more than half the economy, rose 5.5 percent at an annual rate last quarter, the most since the third quarter of 2003, up from 0.9 percent in the previous three months. The first-quarter rate compares with an average of about 3.3 percent over the last two decades.
Cars and light trucks sold at a 17.6 million annual rate in January, the most in six months. Retail sales during the month rose 3 percent on purchases of building materials, furniture and clothing.