US President Barack Obama today declared the US economy was 'in a much better place' than a year ago as growth figures for the first three months of the year spurred hopes of a solid recovery.
'The economy that was losing jobs a year ago is creating jobs today,' Obama said. 'We're moving forward. Our economy is stronger,' he added.
Earlier the Commerce Department reported US gross domestic product grew 3.2% pace in the first quarter.
The first estimate was just below market expectations for growth of 3.3%, but marked the third consecutive quarter of economic expansion as Americans began spending more.
That was seen as further evidence that the world's largest economy is slowly recovering from the worst economic crisis since the 1930s.
'Our economy is stronger. The economic heart beat is growing stronger,' Obama said.
Although positive, many fear the current rate of growth is not enough to recover the eight million US jobs lost since the crisis began. The rate of growth was well down on the final quarter of 2009, when GDP was estimated at 5.6%, the strongest growth in six years.
'While today's GDP report is an important milepost on our road to recovery, it doesn't mean much to an American who has lost his or her job and can't find another,' Obama acknowledged.
Analysts saw the figures as 'further confirming the end of the recession and that the recovery is only moderate and disappointing'.
Consumer spending, which normally accounts for 70% of US economic activity, added 2.55 percentage points to GDP last quarter, the biggest percentage contribution since the fourth quarter of 2006.
Business inventories increased $31.1 billion in the first quarter as businesses restocked to meet firming domestic demand, the first increase since the first quarter of 2008.
Inventories contributed 1.57 percentage points to GDP, less than half the contribution in the last three months of 2009 when businesses became less aggressive in clearing their warehouses.
When businesses slow the rate at which they are liquidating inventories, manufacturers raise production and this boosts GDP. Inventories fell $19.7 billion in the last quarter of 2009. Excluding inventories the economy expanded at a 1.6% rate following a 1.7% pace in the fourth quarter.
Businesses continued to spend on software and equipment, though a bit less vigorously than in the prior quarter. Business investment rose at a 4.% rate after a 5.3% pace in the fourth quarter.
New home construction, which showed some hesitancy early this year, was a drag on growth in the first quarter - after two quarters of gains. Residential investment contracted at a 10.9% rate after growing at a 3.8% pace in the fourth quarter.
