WASHINGTON (Reuters) - The economy grew at a slightly slower-than-expected pace in the first quarter, held back by inventories and exports, but resurgent consumer spending offered evidence of a sustainable recovery, a government report showed on Friday.
Gross domestic product expanded at a 3.2 percent pace, the Commerce Department said in its first estimate -- marking three straight quarters of growth as the economy climbs out of the worst recession since the 1930s.
Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 3.4 percent rate in the first three months of 2010 after a 5.6 percent growth pace in the fourth quarter.
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In current dollar terms, GDP rose 4.1% annualized to an annual rate of $14.6 trillion in the first quarter.
Final sales, which exclude inventories, increased at a 1.6% annual rate in the first quarter.
Consumer spending rose at a 3.6% annual rate in the quarter, adding 2.6 percentage points to GDP.
Spending on durable goods rose 11.3%. Consumer spending on nondurable goods rose 3.9%. Spending on services increased 2.4%, the most in three years.
The savings rate fell to 3.1% from 3.9%.
Business investments rose at a 4.1% rate in the fourth quarter after falling nearly 18% in 2009, the biggest decline since 1942. Capital spending on equipment increased at a 13.4% rate, while investments in structures fell 14%, the seventh straight decline.
Business fixed investment added 0.4 percentage points to first-quarter growth.
Inventories increased by $31.1 billion, the first increase in two years. The change in inventories added 1.6 percentage points to growth.
Investments in housing fell at a 10.9% annual rate in the quarter. Residential investments had fallen for 14 consecutive quarters before gains in the third and fourth quarters of 2009. Residential investments subtracted 0.3 percentage points from growth.
In the first quarter, exports rose 5.8%. Imports increased at an 8.9% annual rate. Net exports subtracted 0.6 percentage points from growth.