U.S. economic growth accelerated to an annual rate of 2.5 percent from January through March, buoyed by the strongest consumer spending in more than two years. Government spending fell, though, and tax increases and federal budget cuts could slow growth later this year.
The Commerce Department said Friday that the economy rebounded from an anemic 0.4 percent annual growth rate in the October-December quarter. Much of the gain reflected a jump in consumer spending, which rose at an annual rate of 3.2 percent. That was the biggest such jump since the end of 2010.
Growth was also helped by businesses, which responded to the greater demand by rebuilding their stockpiles. And home construction rose further.
But government spending fell at a 4.1 percent annual rate, led by another deep cut in defense spending. The decline kept last quarter's increase in economic growth below expectations of a 3 percent rate or more. Continue reading "U.S. economy accelerates at 2.5 percent rate in Q1"