The U.S. economy expanded in the first quarter of 2010 as consumer spending rose by the most since 2007, according to a release by the U.S. Commerce Department. The first “advance” government estimate showed that the U.S. Gross Domestic Product grew on an annualized basis by 3.2 percent in the January to March quarter following a real 5.6 percent growth rate in the fourth quarter of 2009.
This marked the third straight quarter of U.S. economic growth after the GDP had fallen for four straight quarters over the second half of 2008 and the first half of 2009.
Market forecasts were expecting GDP growth to expand by 3.3 percent for the quarter.
Consumer spending was the key driver of growth in the quarter and rose by 3.6 percent following an increase of 1.6 percent in the fourth quarter. Consumer spending makes up roughly two-thirds of U.S. economic activity and the first quarter increase was the largest advance since the first quarter of 2007.
Exports of goods and services grew by 5.8 percent in the first quarter following a gain of 22.8 percent in the fourth quarter of 2009. Imports rose by 8.9 percent after a fourth quarter rise of 15.8 percent.
Also contributing to the economic expansion was an increase in spending on durable goods. Durable goods purchases increased by 11.3 percent in the quarter following a 0.4 percent increase in the fourth quarter. Business investment in equipment and software also rose by 13.4 percent for the quarter as business inventories showed an increase for the quarter.
The second release for the U.S. GDP is scheduled for May 27, 2010 at 8:30 A.M. EDT.