The economy grew at a much better than expected rate in the first quarter, the Commerce Department reported Friday, accelerating strongly out of a slow start to the year.
The Bureau of Economic Analysis reported that gross domestic product grew at a rate of 3.2%, substantially above the projected 2.1%, buoyed by stronger state and local government spending, lower imports and business investment.
The rate is a first estimate, and it may be revised as more data comes in over the next few weeks. It would have been even stronger, the BEA concluded, without the government shutdown — which subtracted 0.3% from growth in the first quarter rate.
Underlying components in the report, however, suggeste the broadly anticipated slowdown was still underway.
Growth was driven in part by higher inventories, especially in the manufacturing industry, which can indicate that businesses are stockpiling goods rather than selling them. Domestic private sales, which subtract out imports and exports as well as government spending, decelerated to half the rate of the previous quarter.
