US economy grows 3.2% in Jan-Mar 2010

Powered by higher consumer spending, the US economy expanded at a healthy pace of 3.2 per cent in the first three months of 2010.

The first-quarter growth rate more or less matched market expectations and was powered by consumer spending, which was up 3.6 per cent, the fastest pace in nearly three years.

"Real gross domestic product -- the output of goods and services produced by labour and property located in the US -- increased at an annual rate of 3.2 per cent in the first quarter of 2010," the US Bureau of Economic Analysis said on Friday.

Analysts were anticipating the economy to clock a growth of around 3.2 per cent in the first quarter of 2010.

After being rattled by the financial meltdown, the economy had contracted 6.4 per cent in first quarter of 2008.

In the first three months, real personal consumption expenditures increased 3.6 per cent as compared to a rise of just 1.6 per cent in the fourth quarter of 2009.

Indicating that economic recovery is on track, after the ravaging financial turmoil, the GDP had climbed 5.6 per cent in the last three months of 2009.

"The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures, private inventory investment, exports, and non-residential fixed investment...," BAE said in a statement.

The rise in consumer spending could also help in improving the country's sluggish labour market situation and in turn bolster economic growth. Despite slow recovery, the jobless rate continues to be more than nine per cent.

"Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 4.1 per cent, or $147.6 billion, in the first quarter to a level of $14,601.4 billion," the statement noted.

For the full year 2009, the world's largest economy shrank 2.4 per cent, whereas the GDP rose 0.4 per cent in 2008.

Rattled by the worst financial turmoils since the 1930s' Great Depression, the American economy had slipped into recession -- generally defined as two straight quarters of negative growth -- in late 2008.

To tide over the crisis, the Federal government had unveiled massive stimulus measures to boost the nation's economic fortunes.