U.S. Economic Growth Up 0.8% vs 0.9% Anticipated

U.S. gross domestic product rose at a 0.8 percent annualized rate in the three months ended in March, which is the smallest gain in a year, according to the Commerce Department. In contrast, that compares with the 0.5 percent advance the government reported last month.

The numbers suggest a lackluster start to the year.  The good news is that household income gains were stronger than previously reported; the labor market strengthened — all of which may spur the biggest driver of economic growth, consumer spending.

Wages and salaries grew by $125.5 billion, the biggest quarterly gain in almost two years and up from the $81.7 billion gain previously reported.

After-tax personal income adjusted for inflation climbed at a 4 percent annualized rate in the first quarter, revised up from a prior estimate of 2.9 percent. The saving rate was also pushed up to 5.7 percent, the highest since the fourth quarter of 2012, from 5.2 percent.

Household purchases, which account for more than two-thirds of the economy, grew at a 1.9 percent annualized rate, the same as initially estimated.

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